The goal of this paper is to develop a nonlinear observer-based control strategy for a jacketed continuous stirred tank reactor (CSTR). The nonlinear adaptive state estimator/observer (ASE/ASO) is designed based on a model structure that mainly consists of an energy balance equation. In this observation approach, reactor concentration is considered as an imprecisely known extra state (augmented state) with no dynamics. Despite significant process/model discrepancy, the proposed state observer estimated adequately the states of the simulated reactor. Mainly due to the design simplicity, negligible computational effort and fast convergence, the observer is recommended for online implementation. The generic model controller (GMC) has also been synthesized for the example reactor. The nonlinear GMC scheme receives the required information about the reactor concentration from the ASE for calculating the controller responses. Simulation experiments have been carried out to investigate the superior performance provided by the proposed GMC-ASE algorithm compared to the conventional proportional integral (PI) controller.