Recent developments of electro-hydraulic disc valves at Surrey University have shown that with a careful balance between the hydraulic and magnetic forces, this type of valve can be used as a digital or proportional device. As the valve is simpler in construction and involves very few critical dimension compared with a servo-valve, the sensitivity to contamination is considerably reduced. The dynamic response of the valve is fast due to utilising high electro-magnetic and fluid forces for actuation. The research described in this thesis is an extension of earlier work by Yuksel and Usman to improve electro-hydraulic disc valves by applying closed-loop position or pressure control to the disc. From an investigation of an unbalanced single disc valve, it was found that using position feedback can help to stabilise the disc under varying load conditions. A special differential capacitive transducer to measure the disc position was designed and constructed and was found to perform satisfactorily. As the pressure-flow characteristic of the valve can be varied by controlling the disc position, the function of the valve is similar to an electrically controlled variable orifice. Various modular configurations are proposed to perform more complicated control functions. In the final part of the research, a double disc valve is described for used in an application study to control the damping characteristic of a modified vehicle shock absorber. Initially, the valve was designed for closed-loop position control due to the non-linear hydraulic and magnetic forces. Results show that the valve can be controlled to generate the required range of damping force and has adequate dynamic performance with a response time in the range of 10 to 30 msec. However, tests using direct pressure control were also carried out. Preliminary results indicate that pressure feedback is preferable to position feedback and that by using lead compensation together with a proportional plus integral controller, stable operation is possible.