A nonlinear speed controller for a separately excited DC motor (SEDCM) based on a newly developed adaptive backstepping approach is presented. To compensate parameter uncertainties and load torque disturbance, a nonlinear adaptive backstepping control law and adaptive law are derived systematically step by step through virtual control input and suitable Lyapunov function. Also, speed observer without using costly speed sensor is presented. Simulation results show that the proposed controller can observe real speed and track the reference speed signal generated by a reference model.