Magnetic levitation system (MLS) is a typical nonlinear system that controls the position of a steel ball with the magnetic force of the electromagnetic actuator. Since disturbances, due to various external forces and modeling errors, may cause excessive vibration or poor command following, disturbance suppression is necessary to improve the control performance of the MLS. This paper presents a control performance improvement approach of an MLS with a disturbance observer (DOB). First, a mathematical model of the MLS was introduced and validated with the measured frequency response. The MLS steel ball was levitated with a proportional–integral–derivative (PID) controller and a DOB was designed based on the physical model of the MLS. Both disturbance rejection and command tracking performances of the MLS with the DOB were investigated with several design parameters such as PID gains and Q filter. The disturbance rejection and command tracking performances were improved by 76.1% and 64.7%, respectively by using DOB. Finally, the disturbance rejection and command-following performances of the MLS with the DOB were verified experimentally. The effectiveness and limitations of DOB were explained with measured closed-loop frequency responses.