A disturbance observer-based vehicle stability controller is proposed in this paper. The lumped disturbance to the vehicle yaw rate dynamics caused by the uncertain factors such as uncertain tire forces and parameters is estimated by the disturbance observer, which is utilized by the robust controller to stabilize the lateral dynamics of the vehicle. The dynamics of the hydraulic actuator is incorporated in the vehicle stability controller design using the model reduction technique. Modular control design methodology is adopted to effectively deal with the mismatched uncertainty. Simulation results indicate that the proposed disturbance observer-based vehicle stability controller can achieve the desired reference tracking performance as well as sufficient level of robustness.