A system and a method for circuit compliance compensated pressure control in a patient respiratory ventilation system, having a pressure regulated feedback servo control loop, a pressure-regulated volume controller, and a patient volume observer. The patient volume observer is operative to estimate a patient volume, that is, the volume actually delivered to the patient by accounting for volume deviation or loss caused by patient circuit leakage and valve dynamics. Based on the difference between the estimated patient volume and a set tidal volume, the pressure-regulated volume controller is operative to generate and update a circuit compliance pressure compensation factor. The pressure regulated feedback servo control loop is operative to modulate the peak airway pressure based on the circuit compliance pressure compensation factor, so as to achieve the set tidal volume while maintaining a constant inspiratory time and a constant I:E ratio.