A new angular rate-sensing scheme for z-axis MEMS oscillatory gyroscopes, which is based on observer-based adaptive control, is presented. The proposed control scheme estimates the component of the angular velocity vector, which is orthogonal to the plane of oscillation of the gyroscope (z-axis), as well as compensates friction forces, and fabrication imperfections, which cause model parameter variations and the presence of off-diagonal terms in the system's stiffness and damping matrix. The convergence and resolution analysis shows that the proposed observer-based adaptive controlled scheme offer several advantages over conventional sensing strategies, including a larger operational bandwidth, producing no zero-rate output, the ability of self-calibration and a large robustness to parameter variations cause by fabrication defects and ambient conditions.