In this paper, a control scheme is designed for stable haptic teleoperation of hydraulic manipulators. The controller results in a stable position tracking for the hydraulic actuator (slave) in both unconstrained and constrained motions. The force feedback at the haptic (master) side is a combination of two different sensations. For free motion, the haptic device provides a haptic force based on the position error between the displacements of the master and the slave. The force also serves to alert the operator when the slave is ahead or behind in position tracking of the master. Once the slave comes in contact with the environment, the haptic force is augmented by the interaction force. The uniqueness, continuation, and existence of the Filippov solution to this system with the discontinuity surfaces are proven first. The extension of Lyapunov's stability theory to nonsmooth systems is then employed to prove the stability by constructing a Lyapunov function. The effectiveness of the controller is validated via experimental studies. It is shown that while stable, the system performs well in terms of position tracking of the hydraulic actuator and providing a haptic feel to the operator. The measurements required by the controller are supply pressure, actuator's line pressures, interaction force, and displacements of the master and slave.