A new nonlinear observer-based controlscheme for a single-phase photovoltaic (PV) systemconnected to the grid is presented.The system consists of a PV array, DC-DC Boost converter and a DC-AC inverter coupled to grid network. The DC-DCconverter is used to extract maximum power from the PV array and the DC-AC inverter is used to synchronize a sinusoidal currentoutput with a voltage gridwith regulated DC bus voltage. A robust nonlinear controller isdeveloped using the sliding mode control design technique based on anaveraged nonlinear model of the whole controlled system. The control action is carried out assuming that all the states of the grid connected PV system are known by measurement. Then, a nonlinear stateobserver for Boost inductor current, DC bus voltage and grid injected current estimation is implemented from the measurementof PV array voltage state, PV array current signal and grid voltage signal. Theobserver-based control method provides robust maximum power point tracking (MPPT), grid current trackingand DC bus voltage regulation, achieves unity power factor and optimizes the PV energy extraction suitable for grid connected PV systems. Simulation results are provided to demonstrate the effectiveness of the proposed design and robustness under different operating conditions such as changes in atmospheric conditions and noise measurements.