The dissertation presents a new control strategy for two terminal HVDC systems embedded in an AC network. The control is based upon real-time measurements performed on the AC/DC system. Use is made of a technique for high speed accurate measurement of positive sequence voltages and currents, first developed in the field of computer relaying. The real-time measurements provides a term in the control law to compensate for inaccuracies following departure from the operating point. The control criterion is to damp out the electromechanical oscillations following a disturbance. The main contribution of the dissertation is to describe a new optimal controller formulation which contains a measurement based component. Optimal controllers are commonly constructed using linearized equations of the system around the operating point. In DC systems this approach is of a very limited value because of a highly nonlinear nature of the system. With the controller developed in this dissertation, it becomes possible to describe the system as a nonlinear dynamic system. The approximation resulting from the usual linearization of the system equations is thus avoided, and leads to a better controller design. The control technique is illustrated with a small AC/DC system. However, the equations formulated are sufficiently general, so that the technique can be applied to a larger system. Simulation results are included to represent the effectiveness of the developed controller. / Ph. D.