In this paper, dynamic characteristics of an end-capped hull structure with surface bonded piezoelectric actuators are studied. Finite element technique is used to ensure application to practical geometry and boundary conditions of smart hull structure. Modal analysis is conducted to investigate the dynamic characteristics of the hull structure. Piezoelectric self-sensing actuators are attached where the maximum control performance can be obtained. Active controller based on Linear Quadratic Gaussian (LQG) theory is designed to suppress vibration of smart hull structure. It is observed that closed loop damping can be improved with suitable weighting factors in the developed LQG controller.