A hydraulic valve actuation system with controlled valve seating velocity and method therefor are proposed. The system includes an actuator with a housing and a drive assembly formed from a drive piston within the housing and an adjustment pin. In an internal combustion engine application, the adjustment pin contacts and moves an engine valve that controls air and fuel entering an engine cylinder. The actuator provides velocity dampening of the drive piston, via an annulus-shaped fluid communication path defined by at least one surface of the drive piston and at least one opposing surface of a damping chamber formed within the housing. The dampening hydraulically cushions the impact of a bottom of the drive piston against a bottom stop of the actuator during opening of the engine valve, which reduces noise and engine wear. In another example, the system is configured to control an engine valve seating velocity.