Conventional electronic engine control systems suffer from poor transient air/fuel ratio control accuracy. This is true of speed-throttle, speed-density, and mass air flow (MAF) control systems with either single point (or central) or port fuel injection. The reason for this is that they fail to 1. compensate for the nonlinear dynamics of the fuel film in the intake manifold or in the vicinity of the intake valves. 2. estimate correctly the air mass flow at the location of the injector(s). This paper presents a nonlinear fuel film compensation network and a nonlinear closed loop observer. The nonlinear fuel film compensator gives improved global cancellation of the fuel film dynamics, while the closed loop observer has improved robustness with respect to modelling error and measurement noise. The closed loop observer is based on a modified constant gain extended Kalman filter. Besides improved robustness, an extra bonus of using the new observer configuration is that it is capable of doing condition monitoring while at the same time carrying out its basic air/fuel ratio control task. The new controller has been tested on a multicylinder engine with excellent results over the entire operating range of the engine.