In the past decade by the development of offshore exploration and exploitation, especially in deepwater, usage, development and optimization of marine craft dynamic positioning (DP) systems have been grown. Filtering and state estimation are the most important issues in designing DP systems. Position and heading measurements are often affected by oscillatory signal due to environmental disturbances such as wind, wave and ocean current as well as sensor noise. Using these measurements directly in control loop causes unacceptable operational function, mechanical wear and tear of the propulsion system components, and extra fuel consumption. Therefore, it is required to extract the oscillatory motion from the total position measurement (called wave filtering). In addition, in many operations such as DP, only control of the low frequency (LF) motion is required. In most cases, velocities of the vessel and values of disturbances are not available and they should be estimated. On the other hand, estimation of these variables from noisy measurements is not desirable. In this thesis, a new approach is presented for wave filtering and state estimation in regulation and dynamic positioning of marine crafts. In this approach, LF and wave frequency (WF) motion components, LF disturbance forces, and vessels velocities are estimated from the measured position signals. Structure of the proposed approach is composed of a filter stage and a nonlinear estimator that are connected in series. The main feature of the proposed approach is that filtering and estimation of LF motions are signal-based and independent from estimation of the LF disturbances and velocities, hence, they are not affected by models uncertainties. Based on the proposed approach, three filter-observer structures including notch filter-observer (NFO), modified notch filter-observer1 (MFO1) and modified notch filter-observer2 (MFO2) are introduced. In each structure, the governing equations are presented and filter stability, observer stability and stability of structures are proven. In practice, the sea state is changing which causes variation of the fundamental frequency of wave and consequently variation of the peak frequency of oscillatory motion of the vessel. Hence, the proposed structures are furnished with an estimation law of fundamental frequency of WF vessel motion that improves their performances considerably and adjusts to actual conditions in operation. Two adaptive structures including adaptive modified notch filter-observer1 (AMFO1) and adaptive modified notch filter-observer2 (AMFO2) are proposed. Several computer simulations using MATLAB/Simulink environment are provided to evaluate performance of the proposed structures. Simulations illustrate the desirable performance of the proposed structures, the efficacy of modifications and their comparison with the conventional approach. Furthermore, the proposed MFO2 was used in the conventional DP control system to evaluate performance of the proposed approach in the control loop. The effect of wave filtering and LF disturbances estimation in DP control system from the point of reducing control signal fluctuations are evaluated by some numerical simulations. This is important in view of reduction of wear and tear in propulsion system and fuel consumption. Simulation results show that using the proposed approach in DP control system leads to better performance in comparison with the conventional method. Keywords: Wave filtering, Disturbance estimation, Dynamic Positioning, Notch filter, Nonlinera observer, Marine craft.