A new time delay compensation strategy for nonlinear processes is developed and evaluated. Simulation results for a continuous stirred tank reactor demonstrate that the globally linearizing control (GLC) compensation technique can yield poor performance in the presence of unmeasured disturbances and/or plant/model mismatch. A theoretical analysis of a discrete-time version of the GLC predictor indicates that the poor regulatory performance is attributable to ineffective use of the process state variables, which are assumed to be measured. A new discrete-time prediction strategy is developed which provides improved predictions, yet maintains the desirable characteristics of the GLC approach. A continuous-time version of the predictor is combined with an input-output linearizing controller to yield the new time delay compensation strategy. The proposed scheme is computationally efficient and not restricted to open-loop stable processes. Simulation results for the reactor example demonstrate the superior performance and robustness of the proposed compensation strategy as compared to the GLC approach.