A nonlinear output feedback controller is constructed for an exothermic, first-order reaction in a continuous reactor where only temperature measurements are available. It consists of two blocks: an observer used to reconstruct the states from available measurement information, and a nonlinear state feedback controller which utilizes the reconstructed state information to determine the control action. Initial conditions of the observer states must be properly chosen for the entire observation process to yield physically meaningful estimates of the system states. When the reactor is subject to measured time-varying feed temperature, the open-loop system exhibits extreme parametric sensitivity, ignition and extinction behavior, and nonlinear oscillations at certain operating conditions. Simulation results of the controlled system at these operating conditions demonstrate satisfactory control behavior. © 1990.