The basic aim of this work is to improve existing model of rotational inverted pendulum by adding new mechanical features, implement the control algorithm to dsPIC microcontroller and develop related control electronics thus extending the functionality of current model while making it more compact. The work contains derivation of dynamic equations both by means of analytical methods and multi-body formalism of SimMechanics. These are used to design a state controller stabilizing the pendulum in inverse position. In addition, parameters of the system are being estimated experimentally. Swing-up controller is developed to drive the pendulum to unstable position. Various state estimators are added to controller to improve the control process while comparing their overall performance. The last point is devoted to development of superior state-automaton designed to switch between different regulating modes including fail-detection algorithms providing smooth operation of the model.