In recent years, the research on failure diagnosis of discrete event systems(DESs) has attracted the attention of many scholars. This paper studies failure diagnosis of stochastic DESs under dynamic observation. Firstly, a kind of dynamic observation is introduced to make the observability of events change dynamically with the operation of the system. Then, the diagnosability of single-failure events and pattern-failure events for stochastic DESs based on dynamic observation are formalized. The necessary and sufficient condition of diagnosability of single-failure and pattern-failure events is obtained by constructing the corresponding diagnoser automata, and failure diagnosis of stochastic DESs under dynamic observation is realized.