Abstract: Observer-based controller is widely accepted for its simple structure and explicit physical meaning. Bur the controller structure is often assumed as general compensator in the procedure of H∞ controller synthesis by LMI technology. This has increased the number of unknown parameters and complicated the design procedure, moreover, the controller derived from this way is unclear in physical meaning. We investigate in this paper the LMI method to design H∞ controller under the assumption of observer-based type. The final result is that controller parameters can be derived from three LMI's and the feasibility problem can be determined by existing tool box.