State estimation for fixed-bed reactors based on reduced bilinear models is presented, with a typical laboratory-scale plant as an example. The reactor is described by a quasi-homogeneous non-linear distributed model. The reduced bilinear model developed in previous works, which can be considered as a singularly perturbed bilinear model, can be approximated by a bilinear model with polynomial inputs. A new bilinear system observer design approach via pole-placement techniques is proposed. The observer is applied to estimate the temperatures of the fixed-bed reactor at the axial orthogonal collocation points using only a few temperature measurements. The temperature and concentration profiles can be obtained by the state of the observer. The efficiency of the suggested model simplification method and bilinear system observer design approach is successfully tested in non-linear simulation studies. It is shown that the observer developed, based on the reduced bilinear model, can give an excellent estimation of the dynamic behaviour of the fixed-bed reactor for the cases considered.