This paper presents a novel smart MEMS accelerometer which employs a hybrid control algorithm and an estimator. This scheme is realized by adding a sliding-mode controller to a conventional PID closed loop system to achieve higher stability and higher dynamic range and to prevent pull-in phenomena by preventing finger displacement from passing a maximum preset value as well as adding an adaptive nonlinear observer to a conventional PID closed loop system. This estimator is used for online estimation of the parameter variations for MEMS accelerometers and gives the capability of self testing to the system. The analysis of convergence and resolution show that while the proposed control scheme satisfies these criteria it also keeps resolution performance better than what is normally obtained in conventional PID controllers. The performance of the proposed hybrid controller investigated here is validated by computer simulation.