This paper addresses the problem of dynamic positioning (DP) of an underactuated autonomous underwater vehicle(AUV) in three dimensional (3D) space. The vehicle is not explicitly controlled in the sway, heave, roll directions. A nonlinear controller for dynamic positioning is designed based on the backstepping control method in the presence of an unknown current and random disturbance. Extended kalman filter (EKF) is used to estimate the vehicle’s motion and current velocities simultaneously. According to the estimated current direction, desired pitch and yaw angles of AUV are determined and controlled. Numerical simulation results are presented and discussed.