Passivity-based control (PBC) relies on an accurate mathematical model and thus its performance will be degraded by the weak robustness against parameters uncertainties, modeling error, and external disturbances. Moreover, it cannot achieve zero tracking error of the steady-state current under parameter uncertainties and modeling error. This paper proposes a novel disturbance-observer- (DO) based PBC (DO-PBC) for static synchronous compensator (STATCOM) to achieve better stability and dynamic performances against disturbances. A DO that has been introduced into the PBC current loop is used to compensate system disturbances, which can improve the robustness of the control system and eliminate the steady-state tracking error. Moreover, the proposed DO-PBC provides faster responses in handling various kinds of disturbances. Then, the detail design process, stability and robustness analysis, and parameters tuning method are investigated and presented. Also, the proposed method is simple to be implemented by the separation principle. The performance comparisons among the proportional integral, the conventional PBC, and the proposed DO-PBC are carried out to show the effectiveness of the proposed method against disturbances and the precise current tracking, via simulation tests and experimental tests based on a down-scale laboratory prototype experiment of 380 V STATCOM.