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Unstructured agricultural field environment and varying jobs need to be done by a tractor bring the autonomous tractor subjected into the changes of its system dynamics. Due to this condition, development of autonomous tractor yaw rate dynamics control system is a challenging study. An observer based optimal controller is employed to control the autonomous tractor yaw rate dynamics control system in this simulation study. Linear quadratic regulator (LQR) is used as the optimal control algorithm, while the Kalman Bucy filter is used as the state observer of the autonomous tractor. This Kalman based LQR method works by combination of optimization and state estimation approaches. Based on the proposed method, the LQR control algorithm provides satisfactory yaw rate controller results, while the Kalman-Bucy filter provides satisfactory estimation results.