A system and a method for circuit compliance compensated volume control in a patient respiratory ventilation system having a flow regulated feedback servo control loop, a volume delivery controller, and a patient volume observer. In the flow regulated feedback servo control loop, an estimate of patient volume is used for feedback control, such that a tidal volume is achieved upon servo regulation, and the peak inspiratory flow is modulated based on volume error between the set tidal volume and the estimated patient volume. Thereby, a constant inspiratory time and a constant I:E ratio can be maintained. In the volume delivery control, the feedback volume error is normalized to a volume error percentage, and the gain of the controller is dynamically changed based on the volume error percentage, such that the controller effort can be minimized when the volume target is approached. The patient volume observer is operative to estimate the patient delivered volume based on the estimated circuit volume and the measured net delivered volume, while the measured net delivered volume includes effects of leaks and valve dynamics and is synchronously captured with true patient breathing.