In this note, a new gradient-based recursive algorithm for estimating parameters of dual-rate sampled-data systems is presented. The basic idea is, by using an output error method, to identify the single-rate models and the unknown noise-free outputs (true outputs) directly from dual-rate input-output data. Further, convergence properties of the proposed algorithm in parameter and output estimation are analyzed; and the result is illustrated and tested with an experimental water-level system.