In this work we extend the Particle Finite Element Method (PFEM) to multi-fluid flow problems with the aim of exploiting the fact that Lagrangian methods are specially well suited for tracking interfaces. We develop a numerical scheme able to deal with large jumps in the physical properties, included surface tension, and able to accurately represent all types of discontinuities in the flow variables. The scheme is based on decoupling the velocity and pressure variables through a pressure segregation method which takes into account the interface conditions. The interface is defined to be aligned with the moving mesh, so that it remains sharp along time, and pressure degrees of freedom are duplicated at the interface nodes to represent the discontinuity of this variable due to surface tension and variable viscosity. Furthermore, the mesh is refined in the vicinity of the interface to improve the accuracy and the efficiency of the computations. We apply the resulting scheme to the benchmark problem of a two-dimensional bubble rising in a liquid column presented in [1], and propose two breakup and coalescence problems to assess the ability of a multi-fluid code to model topology changes.