High bandwidth control of the air-fuel ratio is necessary in order to minimize the exhaust emissions of spark-ignition engines with three-way catalytic converters. A new approach is to implement a control structure based on modern control and estimation theory. This work describes the implementation of an estimator-based controller which uses the feedback from an on-off zirconia exhaust oxygen sensor of the type currently used in production vehicles. The limit-cycle associated with the on-off oxygen sensor in conventional systems is eliminated with the estimator-based control structure. Furthermore, the in-cylinder air-fuel ratio tracks the commanded value, so that if a limit cycle is desired in some areas of the engine's operating range for better catalyst operation, its amplitude and frequency can be set arbitrarily.