This paper presents a study on the dynamics and control of a tubular reactor with recycle loop where an exothermic reaction of the form A --> B takes place. Using a nonlinear distributed parameter model for the process which accounts for diffusion, convection and chemical reaction, and recycle loop dead-time, it is found that the use of the recycle loop reduces the maximum temperature inside the reactor, maintains the desired rate of production of the species B, and introduces a feedback mechanism into the process which renders the open-loop steady state unstable. To stabilize the process, a nonlinear output feedback controller is implemented on the process. The nonlinear controller is synthesized based on an approximate model obtained through application of Galerkin's method with approximate inertial manifolds (nonlinear Galerkin's method) to the detailed process model. The performance of the controller for different values of the recycle ratio is successfully tested through simulations and is found to be superior to the one achieved by nonlinear controllers synthesized based on approximate models obtained from linear Galerkin's method and nonlinear controllers which do not account for the presence of dead-time in the recycle loop.