The strip tension as well as the line speed should be controlled tightly for the quality of products and productivity of the continuous strip processing line. In this paper, a new tension control algorithm with tension observer is proposed using observed tension as regulator feedback. The tension observer is based on the torque balance of a roller stand including the acceleration torque. Using this estimated tension, new tension controller can be constructed with faster dynamic response in case of line speed acceleration or deceleration. The proposed scheme needs no additional hardware because the inputs of observer, current and speed, are already being monitored by the motor drive system. Through the simulations and experiments with laboratory set up, performances fo conventional schemes and proposed one are compared. The results show the effectiveness of the proposed tension controller.