This paper describes the development of an embedded wireless LAN controller which can be in parallel operated with an existing utility controller. The embedded controller mainly consists of Prism(R) 2.5 chip set and Atmega 128 microcontroller. In order to communicate over the network, the controller including TCP/IP stack (IP, TCP, UDP, and ICMP), telnet, and X/Z modem has been developed. For a specific application, we have proposed an special method to convert data structure between TCP/IP and X/Z modem and a data buffer algorithm to minimize the RAM memory usage. Finally, the correctness and performance of the protocols are tested and verified using $CommView^{(R)};and;DU^{(R)}$. The development is satisfactorily operated only for 3,381 bytes of RAM usage without sacrificing interoperability between hosts.