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This paper discusses the decentralized dynamic output feedback stabilization for nonlinear interconnected systems with time delay. We develop the fuzzy interconnected system by using the Takagi-Sugetno (T-S) fuzzy system. The decentralized dynamic output feedback controller is designed to stabilize the fuzzy interconnected system. To guarantee the sufficient condition of stability, we use Lyapunov stability theorem. Its constructive condition is expressed as the linear matrix inequality (LMI). An example is given to show the verification discussed throughout the paper.