SummaryThis paper deals with the problem of designing a nonlinear observer for diesel engines. The goal is to estimate the masses entering the cylinders and the inlet and exhaust pressures. To achieve this, the considered model subject to disturbances contains linear parameter‐varying part and nonlinear part having a large Lipschitz constant. The H ∞ criterion is used to reject the disturbances. Besides, the modified mean value theorem is applied to express the nonlinear error dynamics as a convex combination of known matrices with time‐varying coefficients. The sufficient conditions are derived and given in terms of linear matrix inequality. The advantage of the proposed method is that it can be applied to a wider class of nonlinear systems, particulary our case: diesel engines. The proposed approach is tested and evaluated using an advanced diesel engine professional simulator AMEsim (LMS International, Leuven, Belgium). Copyright © 2014 John Wiley & Sons, Ltd.