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This work considers the design of nonfragile H ∞ observer-based controller for nonlinear networked control systems (NCSs) subject to multipath packet dropouts. The nonlinear NCSs are modeled through the Takagi–Sugeno (T–S) fuzzy model. The occurrences of packet dropouts in the measurable output and the control input indicate the multipath packet dropouts. Two random sequences which are mutually independent and obey the Bernoulli distribution are adopted to represent the multipath packet dropouts. Unlike most existing works about the observer-based controller design, a novel observer design scheme is developed in this paper for the T–S fuzzy NCSs with packet dropouts, which does not require the observer to be designed to share the same local system parameters " A l " as the fuzzy plant. Then, by means of the Lyapunov function approach, sufficient conditions are developed to make certain that the controlled T–S fuzzy NCSs are stochastically stable with a H ∞ performance index. Through adopting a two-step design method, the search for the local system parameters and gains of the observer and the controller gains is formulated as a feasibility problem of linear matrix inequalities (LMIs). Eventually, the effectiveness of the derived results is verified by an example. • The observer cannot always obtain the local system parameters of the T-S fuzzy plant. • A new observer design scheme is developed for T-S fuzzy plant with packet dropouts. • By using the two-step design scheme, the conditions are expressed as strict LMIs. [ABSTRACT FROM AUTHOR]