This letter investigates the design of unknown input (UI) observers for a large class of nonlinear systems using Takagi-Sugeno (TS) fuzzy modeling. To avoid the well-known issue on the unmeasured premise variables in fuzzy observer design, we reformulate the nonlinear systems in a TS fuzzy form with local nonlinear models. A particular feature of these so-called N-TS fuzzy models is that all the unmeasured nonlinearities are isolated in a nonlinear consequent. Together with a judicious use of the differential mean value theorem, the N-TS fuzzy reformulation enables an effective framework to design fuzzy UI observers. Based on an UI decoupling technique, no specific information on the UI is required for fuzzy observer design. The asymptotic estimations of both the state and the UI are guaranteed with fuzzy Lyapunov arguments. The observer gains can be effectively computed following an LMI-based design procedure. Numerical illustrations are given to demonstrate the interests of the proposed method over related existing results.