A new bilateral control scheme is proposed to ensure stable teleoperation under a wide variety of environments and operating speeds. System stability is analyzed in terms of the time-domain definition of passivity. A previously proposed energy-based method is extended to a 2-port network, and the issues in implementing the "passivity observer" and "passivity controller" to teleoperation systems are studied. The method is tested with our two-degrees-of-freedom master/slave teleoperation system. Stable teleoperation is achieved under conditions such as hard wall contact (stiffness > 150 kN/m) and hard surface following.