Abstract: This paper presents a new analysis method for model reference adaptive control (MRAC) with arbitrary bounded input nonlinearities, which does not require the stability of plants. The plant can have unmodeled dynamics and bounded disturbances. A new modified MRAC scheme is also proposed to improve the transient and steady state performances. The output error is used directly in the control law to generate a modified control signal to compensate possible bad performances of the robust adaptive controllers, and the ideal asymptotic properties of MRAC is not destroyed.