Depth and heading control of an AUV are considered to follow the predetermined depth and heading angle. The proposed control algorithm is designed. based on a sliding mode control using estimated hydrodynamic coefficients. The hydrodynamic coefficients are estimated with conventional nonlinear observer techniques, such as sliding mode observer and extended Kalman filter. By using the estimated coefficients, a sliding mode controller is constructed for the combined diving and steering maneuver. The simulation results of the proposed control system are compared with those of control system with true coefficients. This paper demonstrates the proposed control system, discusses the mechanisms that make the system stable and follows the desired depth and heading angle, accurately, in the presence of parameter uncertainty.