In order to improve the quality of the final product from the papermaking process, it is necessary to control the variations of properties such as basis weight (mass per unit area) and moisture content. In modern plants, it is common to use cross-directional control systems to regulate these properties in the direction perpendicular to the movement of the sheet. This paper describes the design of an observer that forms part of a control system for crossdirectional control. Starting from the underlying, continuous-time description of the plant, a “sample and hold” model is developed, where changes are made to the actuator set points on the basis of measurements from a scan and then these set points remain fixed until the next control action is applied. This is then augmented to include the effect of the time delay between a control action being applied at the actuators and its effect being seen by the gauge, as well as the “uneven” sampling introduced by the scanning gauge. The plant is described in terms of a large, time-varying, discrete, state space model, which has a high degree of structure. The design of an observer for the system which gives an estimate of the controllable states is described. By exploiting the structure of the model, the resulting observer has a particularly simple form which makes it easy to implement. An LQ regulator is designed for the process and the performance of the combined observer and controller is simulated.