The theory of observers is a basic part of classical linear system theory. The purpose of this paper is to develop a theory of coherent observers for linear quantum systems. We provide a class of coherent quantum observers, which track the observables of a linear quantum stochastic system in the sense of mean values, independent of any additional quantum noise in the observer. We prove that there always exists such a coherent quantum observer described by quantum stochastic differential equations in the Heisenberg picture, and show how it can be designed to be consistent with the laws of quantum mechanics. We also find a lower bound for the mean squared estimation error due to the uncertainty principle. In addition, we explore the quantum correlations between a linear quantum plant and the corresponding coherent observer. It is shown that considering a joint plant-observer Gaussian quantum system, entanglement can be generated under the condition that appropriate coefficients of the coherent quantum observer are chosen, and this issue is illustrated in an example. These results pave the way towards observer-based quantum control. (C) 2016 Elsevier Ltd. All rights reserved.