This paper deals with the problem of exponential stability and application to observer-based control for a class of nonlinear neutral systems with interval time-varying delay. Using the Lyapunov-Krasovskii functional approach in combination with the free-weighting matrix technique, the authors first derive new delay-range-dependent conditions for the exponential stability of the systems in terms of linear matrix inequalities (LMIs). Then, as an application, the authors design an observer-based controller for exponential stabilization of the system. Finally, numerical examples are provided to illustrate the obtained results.