Summary: The paper presents a new direct model reference adaptive control algorithm for a class of large scale interconnected systems. It is assumed that the system is subjected to bounded disturbances and is characterized by unknown constant parameters which take values within a known bounded range. Conditions are determined under which the adaptive control law guarantees boundedness of the controller parameters and ensures asymptotic stability of the tracking error between the system and the model to a bounded residual set. Application of the algorithm to the problem of damping the electromechanical oscillations in multimachine power systems is also considered. A specific numerical example of a three-machine nine-bus system is presented to illustrate the results.