In the urban traffic mode, the engine is known to be operated mostly in a transient state. However, the wide operating range, the inherent nonlinearities of the induction process and the large modeling uncertainties make the design of the fuel-injection controller very difficult. Even though a sliding mode fuel-injection control method is in good agreement with the characteristics of the system, the unavoidable large time-delay between control action and measurement causes the problem of chattering. In this paper, an observer-based fuel-injection control algorithm is suggested for fast response and small amplitude chattering of the air-to-fuel ratio. The characteristics of the proposed controller are compared with those of other controllers. The proposed controller is simple enough for on-line computation and is implemented on an automotive engine using a PC-386, The simulation and the experimental results show that this algorithm reduces the chattering magnitude considerably while speeding up the transient response and is robust to modeling errors.