AbstractA variable structure model reference adaptive controller (VS‐MRAC) using only input and output measurements was recently proposed and shown to be globally asymptotically stable with superior transient behaviour and disturbance rejection properties. In this paper a singular perturbation approach is used in order to establish the robustness of the controller in the presence of unmodelled dynamics (parasitics) and disturbances. We develop a new Lyapunov‐based technique to analyse the overall system and show that for sufficiently small parasitics the system remains stable and the output error is small in some se