ABSTRACT The industrial process monitoring and operating performance assessment techniques are of great significance to ensure the safety and efficiency of the production and to improve the comprehensive economic benefits for the modern enterprises. In this paper, a new key performance indicator (KPI) oriented nonlinear process monitoring and operating performance assessment method is proposed based on the improved Hessian locally linear embedding (HLLE), in view of the problems of strong nonlinearity, high dimension and information redundancy in actual industrial process data. Firstly, in order to characterise the similarities of samples in both temporal and spatial dimensions, a new measurement, based on Finite Markov theory, is defined to replace the Euclidean distance in traditional HLLE. Secondly, by mining the relationships between process variables and the key performance indicator, the KPI oriented feature extraction method is developed. On this basis, the monitoring statistics is constructed and the corresponding control limit is determined for the real-time fault detection. After that, a new operating performance assessment approach based on sliding window Kullback–Leibler divergence is put forward to facilitate maintenance or adjustments. Finally, the proposed method is applied to the hot strip mill process, and the results show the effectiveness.