This paper proposes a design method for a wide-area measurement and control based Optimal Regulator incorporating Observers to improve the stability of power system. When quantities of all states of a system is possible to observe, it’s known to be able to locate the pole of the control system optionally to some extent. However, it is difficult to observe quantities of all states in the generator with the real electric power system. Therefore, with "an observer", quantities of all states can be restored from observable quantities and Optimal Regulator is enabled. The numerical simulation results show that the proposed method can improve the stability of power system.