The advent of high fuel costs and the increasing crowding of shipping lanes have initiated considerable interest in ship automatic pilot systems, that not only hold the potential for reducing propulsion losses due to steering, but also maintain tight control when operating in confined waterways. Since the two requirements differ significantly in terms of control specification it is natural to consider two separate operating modes. Conventional autopilots cannot be used efficiently here, partly because the original design catered for good gyrocompass heading control only, and partly because the requirement of reducing propulsion losses cannot be easily translated into control action in such schemes. Linear quadratic control can be used to design a dual mode autopilot. The performance criterion to be minimised can readily be related to either the propulsion losses while course-keeping, or to the change of heading while manouevring, and therefore, the same controller can be used for both functions. The designed control system is shown, from the computer simulation study, to perform satisfactorily in disturbed seas. However, the need for detailed knowledge of the ship dynamics in the controller design implies that time-consuming ship trials may be required. Hence an alternative method of design using adaptive self-tuning control is studied. Because the self-tuning approach combines controller design and coefficient identification in such a way that the two processes proceed simultaneously, only the structure of the equation of ship motion is needed. As in the case of quadratic control, a well specified performance criterion is firmly linked to the design so that a closely controlled optimal performance results.