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The hydraulic coupling in the series-bypass circuit is examined in this paper. Application of multivariable techniques to the series-bypass circuit is also presented. The series-bypass circuit combines variable displacement pumps and serially connected, bypass flow modulated actuators. A prototype series-bypass circuit is mathematically modeled and analyzed using linear dynamic models and a nonlinear time domain simulation. Pseudo-diagonalization techniques and Rosenbrock's INA methods are applied to the linear model and used to minimize coupling, determine the stable gain space and design compensation. The feasability of using a linear model for these purposes is confirmed by simulation results. Experimental data is compared to the linear model and simulation and found to exhibit the same dependences on operating conditions but some discrepancies are found between pseudo-diagonalization and INA predications and empirical behavior.