In this paper, a nonlinear controller design method based on a nonlinear state space model is proposed. By adding differentiable saturation elements, this controller design scheme can deal with the saturation of the manipulated variables. Linear approximation is successively executed at each sampling time. The velocity-type controller and observer are designed based on the linear model. For the calculation of linear approximation, the information of the states at the previous sampling time must be known. A nonlinear observer using integration of nonlinear state equations is adopted for the state estimation. The observer gain of the linear observer is applied to the nonlinear observer. This control system can stabilize open-loop unstable processes and non-minimum phase systems. The performance is demonstrated by its successful application to control problems of a CSTR, which has two stable points and one unstable steady-state point.