The present work focuses on the system identification method of aerodynamic parameter estimation which is used to calculate the stability and control derivatives required for aircraft flight mechanics. A new rotorcraft parameter estimation technique is proposed which uses a type of artificial neural network (ANN) called radial basis function network (RBFN). Rotorcraft parameter estimation using ANN is an unexplored research topic and the earlier works in this area have used the output error, equation error and filter error methods which are conventional parameter estimation methods. However, the conventional methods require an accurate non-linear rotorcraft simulation model which is not required by the ANN based method. The application of RBFN overcomes the drawbacks of multilayer perceptron (MLP) based delta method of parameter estimation and gives satisfactory results at either end of the ordered set of estimates. This makes the RBFN based delta method for parameter estimation suitable for rotorcraft studies, as both transition and high speed flight regime characteristics can be studied. The RBFN based delta method for parameter estimation is used for computation of aerodynamic parameters from both simulated and real time flight data. The simulated data is generated from an 8-DoF non-linear simulation model based on the Level-1 criteria of rotorcraft simulation modeling. The generated simulated data is used for computation of the quasi-steady and the time-variant stability and control parameters for different flight conditions using the RBFN based delta method. The performance of RBFN based delta method is also analyzed in the presence of state and measurement noise as well as outliers. The established methodology is then applied to compute parameters directly from real time flight test data for a BO 105 S123 helicopter obtained from DLR (German Aerospace Center). The parameters identified using the RBFN based delta method are compared with the identified values for the BO 105 helicopter from published literature which have used conventional parameter estimation techniques for parameter estimation using a 6-DoF and a 9-DoF rotorcraft simulation model. Finally, the estimated parameters are verified from the flight data generated by a frequency sweep pilot control input for assessing the predictive capability of the RBFN based delta method. Since the approach directly computes the parameters from flight data, it can be used for a reliable description of the higher frequency range, which is needed for high bandwidth flight control and in-flight simulation.