We consider the problem of stabilization of a one-dimensional wave equation that contains instability at its free end and control on the opposite end. In contrast to classical collocated "boundary damper" feedbacks for the neutrally stable wave equations with one end satisfying a homogeneous boundary condition, the controllers and the associated observers designed in the paper are more complex due to the open-loop instability of the plant. The controller and observer gains are designed using the method of "backstepping," which results in explicit formulae for the gain functions. We prove exponential stability and the existence and uniqueness of classical solutions for the closed-loop system. We also derive the explicit compensators in frequency domain. The results are illustrated with simulations. (C) 2007 Elsevier Ltd. All rights reserved.