In this paper, sliding mode control and disturbance observer are used to design a new continuous composite guidance law with terminal angle constraint. The robustness and finite-time convergence of the proposed guidance law is established using the Lyapunov stability theory. For performance improvement, a nonlinear disturbance observer, which can be viewed as a ‘patch’ for the original guidance law, is designed to estimate the target manoeuvre. Theoretical analysis and simulation results demonstrate the effectiveness of the proposed method.