This paper presents a disturbance observer based adaptive sliding mode controller. The switching gain of the controller is adjusted based on the estimated value of the disturbances to avoid high amplitude chattering. The main idea here is to consider the unknown disturbances in sliding function dynamics which results in a simple linear observer. The proposed technique is then applied to a single machine infinite bus(SMIB) power system. Numerical simulations are presented to validate the technique. © 2015 IEEE.