An adaptive power system stabilizer is described in this paper. The stabilizer algorithm consists of an explicit identifier using recursive least squares identification technique. Control is computed using the linear-quadratic control algorithm. Deterioration in the quality of identification immediately following a large disturbance and the possibility of loss of stability is countered by retaining the prefault parameters for a short period after the inception of a large disturbance. The parameter update is reinitiated after this period. The proposed technique was first tested by simulation. It was then implemented on a microcomputer. Simulation and real-time experimental results show that the adaptive stabilizer is very effective in damping out synchronous machine oscillations following system disturbances