Abstract: A robust adaptive observer is proposed for nonlinear large-scale systems with unknown parameters,disturbances and unmodeled dynamics.A dynamic signal is introduced for each subsystem to dominate the unmodeled dynamics independently and an adaptive nonlinear damping is used to counter the effects of the interconnections.With the proposed observer,estimating the unknown parameters and solving linear matrix inequalities are not needed.It is proved theoretically that the observer's errors are uniformly bounded and the estimation errors can be made arbitrarily small by choosing some design parameters appropriately.