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Emphasis of the present work is on an elegant real-time solution for GPS/INS integration. Micro-electro mechanical system (MEMS) based inertial sensors are light but not accurate enough for inertial navigation system (INS) applications. An integrated INS/GPS system provides better accuracy compared with either INS or GPS, used individually. This paper describes an improved design and fabrication of a loosely coupled INS-GPS integrated system. The systems currently available use commercial off-the-shelf (COTS) hardware and are, therefore, not optimized for compact, single supply, and low power requirements. In the proposed system, a digital signal processor (DSP) is used for inertial navigation solution and Kalman filter computations. A field programmable gate array (FPGA) is used for creating an efficient interface of the GPS with the DSP. Direct serial interface of the GPS involve tedious processing overhead on the navigation processor. Therefore, a universal asynchronous receiver transmitter (UART) and dual port random axis memory (DPRAM) are created on the FPGA itself. This also reduces the total chip count, resulting in a compact system. The system is designed to give real time processed navigation solutions with an update rate of 100 Hz. All the details of this work are presented.