Abstract This article proposes a two‐step interval estimation method for continuous‐time linear time‐invariant systems with unknown but bounded disturbances and measurement noise. In the first step, method is used to design a robust reduced‐order observer that attenuates the impact of the system uncertainties on the estimation error. In the second step, a non‐conservative interval prediction of the estimation error is achieved by applying a symmetric set‐integration approach. The resulting tight set‐valued state estimation is obtained by combining the point estimation from the reduced‐order observer with the predicted estimation error set provided by the set‐integration method. Compared to the conventional methods, the proposed method is built on less‐restrictive design conditions, that allow one to deal with a large range of applications. On the other hand, numerical simulations show that the proposed method offers more precise interval estimation compared to an optimal reduced‐order interval observer selected from recent literature.