A general scheme for a discrete adaptive observer having exponential data weighting properties is presented for a single-input single-output linear system. In this scheme, all the past measurement data are weighted exponentially both with the weighting factor and the stable matrix F. This observer is then used in the indirect adaptive pole placement controller. To increase numerical stability in getting the controller parameter, a recursive algorithm is introduced. Computer simulation and D.C. motor speed control demonstrate the effectiveness ofthe proposed scheme.