We propose a generic spatial domain control scheme for a class of nonlinear rotary systems of variable speeds and subject to spatially periodic disturbances. The nonlinear model of the rotary system in time domain is transformed into one in spatial domain employing a coordinate transformation with respect to angular displacement. Under the circumstances that measurement of the system states is not available, a nonlinear state observer is established for providing the estimated states. A two-degree-of-freedom spatial domain control configuration is then proposed to stabilize the system and improve the tracking performance. The first control module applies adaptive backstepping with projected parametric update and concentrates on robust stabilization of the closed-loop system. The second control module introduces an internal model of the periodic disturbances cascaded with a loop-shaping filter, which not only further reduces the tracking error but also improves parametric adaptation. The overall spatial domain output feedback adaptive control system is robust to model uncertainties and state estimated error and capable of rejecting spatially periodic disturbances under varying system speeds. Stability proof of the overall system is given. A design example with simulation demonstrates the applicability of the proposed design.