Hovercraft is commonly used for military operations, transportation, and scientific research. Therefore, considering the use of hovercraft, it is very important to design a controller that ensures its stabilization to enhance its performance. Since a hovercraft has only two control inputs with three degrees of freedom, designing a stabilization controller is a very difficult task. The hovercraft model is derived from a simple ship equation that is nonlinear and underactuated. In this work, the controller design is conducted for the full-state stabilization problem to stabilize the underactuated hovercraft. Using the inputs and state transformations, the dynamic model of the hovercraft is transformed into an equivalent system consisting of two cascaded connected subsystems. Dynamic input terms are introduced due to the modified dynamic cascaded system, and an adaptive sliding mode control (SMC) scheme is employed to handle these terms and to clutch the stabilization problem. To eliminate the high-frequency switching effect in SMC and enhance the speed of reaching phase, an atan-based strong exponential reaching law is employed. To construct the stabilizing controller, an appropriate Hurwitz sliding surface and a Lyapunov function are selected, and the adaptive laws are derived such that the derivative of the Lyapunov function is strictly negative, so as to guarantee the stability of the closed-loop system. To demonstrate the efficacy of the proposed control, numerical simulations are run to stabilize the planar position and orientation, revealing that all states and control inputs are asymptotically convergent to the origin since a quantitative comparison is also made between the classical switching law and the suggested switching law for energy consumption.