For a class of nonlinear multivariable dual-rate systems with strong couplings and uncertainties, a dual-rate adaptive decoupling controller with nonlinear compensation is proposed. First, a dual-rate model is derived by using the polynomial transformation technique, where the unknown parameter matrices are identified by using the available dual-rate data, and the unknown nonlinear term is compensated by using the identification error. Based on the dual-rate model, the adaptive decoupling controller is then designed. The stability at sampling time of the closed-loop system is presented. Finally, simulations are conducted on a dual-tank water flow-level cascade control system. The results illustrate the effectiveness of the proposed method.