As an important part of the smart grid, a wide-area measurement system (WAMS) provides the key technical support for power system monitoring, protection and control. But 20 uncertainties in system parameters and signal transmission time delay could worsen the damping effect and deteriorate the system stability. In the presented study, the subspace system identification technique (SIT) is used to firstly derive a low-order linear model of a power system from the measurements. Then, a novel adaptive wide-area damping control scheme for online tuning of the wide-area damping controller (WADC) parameters using the residue method is proposed. In order to eliminate the effects of the time delay to the signal transmission, a simple and practical time delay compensation algorithm is proposed to compensate the time delay in each wide-area control signal. Detailed examples, inspired by the IEEE test system under various disturbance scenarios, have been used to verify the effectiveness of the proposed adaptive wide-area damping control scheme.