An idle speed engine model has been proposed and applied for the development of an idle speed controller for a 125 cc two wheeler spark ignition engine. The procedure uses the measured Indicated Mean Effective Pressure (IMEP) at different speeds at a constant fuel rate and throttle position obtained by varying the spark timing. At idling conditions, IMEP corresponds to the friction mean effective pressure. A retardation test was conducted to determine the moment of inertia of the engine. Using these data, a model for simulating the idle speed fluctuations, when there are unknown torque disturbances, was developed. This model was successfully applied to the development of a closed loop idle speed controller based on spark timing. The controller was then implemented on a dSPACE Micro Autobox on the actual engine. The Proportional Derivative Integral (PID) controller parameters obtained from the model were found to match fairly well with the experimental values, indicating the usefulness of the developed idle speed model. Finally, the optimized idle speed control algorithm was embedded in and successfully demonstrated with an in-house built, low cost engine management system (EMS) specifically designed for two-wheeler applications.