Abstract The problem of controlling nonlinear nonminimum-phase systems is considered, where standard input-output feedback linearization leads to unstable internal dynamics. This problem is handled here by using the observability normal form in conjunction with input-output linearization. The system is feedback linearized upon neglecting a part of the system dynamics, with the neglected part being considered as a perturbation. A linear controller is designed to accommodate the perturbation resulting from the approximation. Stability analysis is provided based on the vanishing perturbation theory.