A thruster controlled AUV is being developed for the Indian AUV project. All motions and control is carried out by a set of five thrusters for controlling positions in two attitudes and three linear directions. As a prototype and verification system for the above AUV, a test-bed to develop and validate the control schemes was found necessary and has been developed at IIT Kharagpur. This paper describes the design criteria of the test-bed and the methods used to develop control scheme for such class of underwater vehicles, which are wholly thruster controlled and can be implemented in this test-bed. The design and capabilities of such a test-bed has been considered for taking into account similar thruster actuated AUVs which may be used in conditions like low speed motion as well as high maneuverability, station keeping etc. Such vehicles are different from the hydroplane controlled vehicles which are more effective above a certain operational velocity. The test-bed proposed here is targeted to generate valuable experimental data for full thruster controlled underwater vehicles operating over a range of operational velocities including station keeping to cruising modes. © 2006 IEEE.