In this work, we present a novel unfitted mesh boundary strategy in the context of the Particle Finite Flement Method (PFEM) aiming to improve endemic limitations of the PFEM relative to boundary conditions treatment and mass conservation. In this new methodology, which we called Cut-PFEM, the fluid–wall interaction is not performed by adding interface elements, as is done in the standard PFEM boundaries. Instead, we use an implicit representation of (all or some of) the boundaries by introducing the use of a level set function. Such distance function detects the elements trespassing the (virtual) contours of the domain to equip them with opportunely boundary conditions, which are variationally enforced using Nitsche’s method. The proposed Cut-PFEM circumvents important issues associated with the standard PFEM contact detection algorithm, such as the artificial addition of mass to the computational domain and the anticipation of contact time. Furthermore, the Cut-PFEM represents a natural ground for the imposition of alternative wall boundary conditions (e.g., pure slip) which pose significant difficulties in a standard PFEM framework. Several numerical examples, featuring both no-slip and slip boundary conditions, are presented to prove the accuracy and robustness of the method in two-dimensional and three-dimensional scenarios.