Due to many special characteristics of the motion of a yacht in response to wind, sea and other conditions, the issues associated with designing an automatic controller for a yacht steering and rolling stabilisation are quite different from those for engine-powered vessels. This paper presents some simulation results of the behaviour of a 12-m America's Cup yacht, indicating the non-linear character of yacht motion. With a view to developing an adaptive steering and roll damping controller for yachts, the behaviour of linear yacht models is examined and a case presented for online recursive modelling. Some aspects of adaptive controller design are reviewed and simulation results are presented of the performance of the resulting adaptive control law using a Simulink model of the 12-m America's Cup yacht model.