So far there is still no result available for backstepping based decentralized adaptive stabilization of unknown systems with interactions directly depending on subsystem inputs, even though such interactions commonly exist in practice. In this paper, we provide a solution to this problem by considering both input and output dynamic interactions. To clearly illustrate our approaches, we will start with linear systems and then extend the results to nonlinear systems. Each local controller, designed simply based on the model of each subsystem by using the standard adaptive backstepping technique without any modification, only employs local information to generate control signals. It is shown that the designed decentralized adaptive backstepping controllers can globally stabilize the overall interconnected system asymptotically. The L-2 and L-infinity norms of the system outputs are also established as functions of design parameters. This implies that the transient system performance can be adjusted by choosing suitable design parameters. (C) 2008 Elsevier Ltd. All rights reserved.