Voltage sags are common events on the electric power network caused by network faults and the large load connections. This power quality issue can affect a wide range of electrical equipment malfunctions, interruptions or losses and are of particular concern to industry. A complete knowledge of the source is a prerequisite before any remedial action is taken. On the other hand, it is not feasible to fully monitor voltage sags occurred throughout the network. For this reason state estimation techniques have been extended into power quality issues and called Power Quality State Estimation (PQSE). This paper, introduces the use of Transient State Estimation (TSE) as one type of PQSE for voltage dip/sag assessment. The presented approach makes use of mismatch nodal voltage to identify the type and location of voltage dip/sag origin via limited number of measurement points within the network. Then, this algorithm is applied to a distribution test system to verify its performance in presence of measurement noise. © 2012 IEEE.