Taking a closed airbag suspension system as studying objects, the nonlinear dynamic model of the reservoir, compressor, solenoid valve, pipeline and air spring is established. The compressor exhaust volume, solenoid valve flow rate and air spring charging and discharging rate are calculated and compared with experiment to validate the model. Taking pressure difference and height adjustment rate under different working conditions of an airbag suspension as control measures, a control strategy is developed based on the established nonlinear dynamic model. The result indicates that when the vehicle is in curb weight, design weight and GVW (gross vehicle weight), the working time of the compressor can be reduced by 13.6%, 15.1% and 46.5%, respectively, compared with the conventional mode, during a height adjustment cycle. Then a state observer is proposed to estimate the steady-height for reducing the disturbance of measured height from road excitation. According to the required height error and pipeline pressure, a method for adjusting compressor speed to reduce the influence of pipeline pressure on height adjustment accuracy is proposed.