In this paper, observer-based state feedback speed controller for torsional vibration suppression of a 2-mass system is proposed. Because of the difficulty of measuring the load speed and the shaft torque in real plant, the reduced observer is used to estimate not only the unknown states but also the load torque disturbance. Simulations and experiments carried out to verify this algorithm in comparison with conventional PI controller. This controller shows better command following characteristic without torsional vibration. The speed response to the rapid load torque change is also examined to show the disturbance rejection characteristic which is specially important in industrial applications such as rolling mill drives. At the moment of impact load, the speed drop is reduced and the recovery time is shortened remarkably.< >