Because of increasingly stringent requirements on engine efficiency and emission control, the air-fuel ratio (AFR) control strategies for port injection spark ignition (SI) engines are still continuously improved. The effects of time delay limit the AFR controller gains and degrade the system performance. The Smith predictor can be applied to overcome this problem. However, the implementation of this predictor requires accurate information of the system parameters and time delay. Hence, this paper proposes an adaptive algorithm for feedback time delay compensation in the AFR control system of a port injection SI engine. This adaptive algorithm with Smith predictor is applied to estimate and compensate the feedback time delay. The simulation results show that the proposed compensator with conventional Smith predictor can be used to improve the AFR control system efficiency and reduce the effects of time delay.