A system and method for detecting memory leaks includes a monitoring agent, a user interface for configuring operating parameters and a reporting mechanism. The monitoring agent determines allocated memory levels of a monitored application at a sampling frequency and determines when a then-existing "peak" memory level has increased. The monitored application is determined to be leaking memory when a determined number of increases in the peak allocated memory level are detected. The determined number may be fixed ahead of time or may be calculated dynamically based on user specified parameters. When a given memory leakage rate is exceeded, an alarm response is taken, which may be either a specified notification of the alarm or an action. Certain increases in the peak allocated memory levels are ignored as not necessarily being indicative of a memory leak condition, such as during startup of the program or between rapidly, closely-occurring increases in the peak allocated memory level.