In order to improve the lateral and directional performance of vehicles, this paper proposes a novel rear-steering based decentralized control (RDC) algorithm for four-wheel-steering (4WS) vehicles. Based on a linearized single-track vehicle model, a prototype of the RDC algorithm for linear conditions is derived. Linear analysis in frequency domain shows that the RDC can significantly reduce the magnitude and increase the phase lag of sideslip response as well as enlarge the bandwidth of yaw response in a broad frequency range. Through the incorporation of a novel sliding mode controller, the RDC algorithm is further extended for nonlinear applications. Analysis based on nonlinear model shows that, the RDC can guarantee the performance of the closed-loop (CL) system in the presence of uncertainties in system parameters and state feedback values. Moreover, the RDC is robust to arbitrary lateral disturbances and can guarantee that the vehicle converges to reference yaw rate and zero sideslip. Simulation results show that the RDC can effectively improve the lateral and directional performance of the vehicle in comparison with previous control methods. Excellent robustness to external disturbance and road friction variation is reported as well.