In this study, dynamic characteristics of an end-capped hull structure with surface-bonded piezoelectric actuators are studied and active vibration controller is designed to suppress the undesired vibration of the structure. Finite-element modelling is used to obtain practical governing equation of motion and boundary conditions of smart hull structure. A modal analysis is conducted to investigate the dynamic characteristics of the hull structure. Piezoelectric actuators are attached where the maximum control performance can be obtained. Active controller on the basis of a linear quadratic Gaussian (LQG) theory is designed to suppress the vibration of smart hull structure. It is observed that closed-loop damping can be improved with suitable weighting factors in the developed LQG controller and the structural vibration can be successfully suppressed.