This paper presents a novel time delay-compensation method for delayed teleoperation systems based on the concept of network disturbance (ND) and an adaptive fuzzy observer. Firstly, a new adaptive fuzzy observer is developed to estimate the robot states, linearize the robot dynamics as well as eliminate model uncertainty and unknown disturbances. With the linearized robot model, a network disturbance observer is then proposed to estimate the ND by lumping all undesired effects caused by time delay into the ND. Furthermore, the proposed delay compensator is applied to a 4 channel time delayed bilateral control system to deal with the communication delay issue. The effectiveness of the proposed method is demonstrated through experiment study.