This paper describes a model-based control approach to synthesizing a nonlinear controller for a single-spool gas turbine engine. Since the main control variable, engine thrust, cannot be directly measured, a model-based observer is constructed using a nonlinear model of the engine in order to provide an on-line estimation of the thrust for feedback control. Both proportional and proportional-integral (PI) observers have been used in the model-based observer design. The latter is intended to provide a robust estimation in the event of modeling errors. The controls are the fuel flow and final nozzle area, and the control structure is the PI controller designed using the KQ (K-matrix compensator, Q-desired response) multivariable design technique. A study has been made of the model-based observer control scheme when the engine is subjected to the disturbance of inlet flow distortion. The results are shown to be acceptable in terms of the thrust response and the transient trajectory on the compressor characteristic.