The paper presents an iterative identification method dedicated for industrial processes. The method consists of two steps. In the first step, a MISO system is identified with the Modulating Functions Method to obtain sub-models with a common denominator. In the second step, the obtained subsystems are re-identified. This procedure enables to obtain the set of models with different denominators of the transfer functions. The algorithmwas used for on-line identification of a glass conditioning process. Identification window is divided into intervals, in which the models can be updated based on recent process data, with the use of the integral state observer. Results of the performed simulations for the identified models are compared with the historical process data.