With the growing complexity of vehicle control systems it is becoming increasingly important to understand the interaction between drivers and vehicles. Existing driver models do not adequately characterise limitations resulting from drivers’ physical systems. In particular, sensory dynamics limit the ability of drivers to perceive the states of real or simulated vehicles. Therefore, the aim of this thesis is to understand the impact of sensory dynamics on the control performance of a human driver in real and virtual environments. A new model of driver steering control is developed based on optimal control and state estimation theory, incorporating models of sensory dynamics, delays and noise. Some results are taken from published literature, however recent studies have shown that sensory delays and noise amplitudes may increase during an active control task such as driving. Therefore, a parameter identification procedure is used to fit the model predictions to measured steering responses of real drivers in a simulator. The model is found to fit measured results well under a variety of conditions. An initial experiment is designed with the physical motion of the simulator matching the motion of the virtual vehicle at full scale. However, during more realistic manoeuvres the physical motion must be scaled or filtered, introducing conflicts between measurements from different sensory systems. Drivers are found to adapt to simple conflicts such as scaled motion, but they have difficulty adapting to more complicated motion filters. The driver model is initially derived for linear vehicles with stochastic target and disturbance signals. In later chapters it is extended to account for transient targets and disturbances and vehicles with nonlinear tyres, and validated once again with experimental results. A series of simulations is used to demonstrate novel insights into how drivers use sensory information, and the resulting impact on control performance. The new model is also shown to predict difficulties real drivers have controlling unstable vehicles more reliably than existing driver models.