Automatic gage control (AGC) system is important for cold tandem mill rolling of steel. We studied a new gage and tension control system, based on inverse linear quadratic (ILQ) design theory. First, we designed the ILQ controller for the first stand of the cold tandem mill. Next, we analyzed the ILQ control law, and modified the original controller. Finally, we installed the modified controller in the plant, and achieved very high accuracy of cold strip gage. The focus of this study is the analysis of the function of the control loops, using parametric representation of the control law.