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SUMMARY Hydraulic actuators are typically used in a real‐time hybrid simulation to impose displacements to a test structure (also known as the experimental substructure). It is imperative that good actuator control is achieved in the real‐time hybrid simulation to minimize actuator delay that leads to incorrect simulation results. The inherent nonlinearity of an actuator as well as any nonlinear response of the experimental substructure can result in an amplitude‐dependent behavior of the servo‐hydraulic system, making it challenging to accurately control the actuator. To achieve improved control of a servo‐hydraulic system with nonlinearities, an adaptive actuator compensation scheme called the adaptive time series (ATS) compensator is developed. The ATS compensator continuously updates the coefficients of the system transfer function during a real‐time hybrid simulation using online real‐time linear regression analysis. Unlike most existing adaptive methods, the system identification procedure of the ATS compensator does not involve user‐defined adaptive gains. Through the online updating of the coefficients of the system transfer function, the ATS compensator can effectively account for the nonlinearity of the combined system, resulting in improved accuracy in actuator control. A comparison of the performance of the ATS compensator with existing linearized compensation methods shows superior results for the ATS compensator for cases involving actuator motions with predefined actuator displacement histories as well as real‐time hybrid simulations. Copyright © 2013 John Wiley & Sons, Ltd.