This paper presents a novel observer-based control strategy to improve the vehicle roll behavior performance through magneto-rheological (MR) dampers under steering wheel input and various road excitation conditions. Since the vehicle roll with sudden steering input is an essential part of driving safety and possesses inherent nonlinearities, the full-car nonlinear Takagi-Sugeno (T-S) fuzzy model is first established to describe the vehicle roll dynamics considering nonlinear coupling dynamics of tire lateral force and MR damper force under road excitation input. Furthermore, a T-S model-based fuzzy observer is adapted to estimate the vehicle roll angle and roll rate. The stability conditions for the used T-S observer are calculated using linear matrix inequalities (LMIs), and the proposed observer is induced by solving the proposed LMI. Based on the Lyapunov function, sliding mode theory and prescribed performance function, a novel state observer-based prescribed performance control strategy is developed to constrain the controlled vehicle roll angle and roll rate state within the prescribed performance boundaries. Finally, the proposed techniques are validated through the J-turn and Fishhook tests conducted via a high-fidelity CarSim software platform.