The disturbance estimation and compensation was introduced into close loop control systems to improve the low speed performance and disturbance rejected ability of photoelectric stabilized platforms. An original Velocity based Disturbance Observer (VDOB) was proposed and its characteristics were studied. The working principle of regular Disturbance Observer (DOB) was introduced and its drawbacks in applications to stabilized platforms were pointed out. By introducing a nominal model of stabilized platforms, the VDOB was established based on velocity signals, the structure of closed loop control system with VDOB was given, and its transfer behavior, disturbance rejected ability and robustness were analyzed. Finally, some simulations and experiments were carried out. Experiment results show that the PI controller with VDOB can overcome the speed creeping problem existed in traditional PI controllers when the platform does sinusoidal movement. Furthermore, the velocity disturbance isolation level of the platform after using PI controller with VDOB is increased by about 14 dB, Correspondingly, the stabilization precision of platform is increased from 0.03°(RMS) to 0.0044°(RMS) when the vehicle on platform is moved in sinusoidal manner at 1 Hz and 6.3(°)/s. In conclusion, the proposed VDOB is effective and valuable.