This paper deals with the problem of H∞ fault estimation for a class of linear discrete time-varying systems with L2-norm bounded unknown input. The main contribution is the development of a new Krein space-based approach to H∞ fault estimation. The problem of H∞ fault estimation is firstly equated to the minimum of a scalar quadratic form. Then, by introducing a corresponding system in Krein space, a sufficicnt and necessary condition on the existence of an H∞ fault estimator is derived and a solution to its parameter matrices is obtained in terms of matrix Riccati equation. Finally, two numerical examples are given to demonstrate the efficiency of the proposed method.