The characteristic of a new type voice coil motor-direct drive valve(VCM-DDV) was investigated based on the co-simulation environment of AMESim and Simulink. By using AMESim the VCM-DDV nonlinear model and hydraulic environment have been set up. By using Simulink the digital controller mode has been set up. A strategy of divide the VCM-DDV model into linear part and nonlinear part was proposed. Regards the nonlinear part as a disturbance factor when derive the linear state space model, the disturbance as one of states in space state vector has been set up. A full state observer was designed to estimate the spool position, velocity and the disturbance. Then a linear quadratic regulator(LQR) state feedback control algorithm with a nonlinear compensator was applied. The simulation result demonstrates this control algorithm improve steady precision and dynamic performances both.