Abstract The use of drilling automation is accelerating, mostly in the area of rate of penetration (ROP) enhancement. Autonomous directional drilling is now a high focus area automating the drilling operations. The potential impact is immense as 93% of the active rigs in the US are drilling directional or horizontal wells. The 2018-2019 DSATS-led international Drillbotics® Student Competition includes automated directional drilling. This paper discusses the detailed design of the winning team. It presents the surface equipment, downhole tools, data and control systems, and lessons learned. The Drilling Systems Automation Technical Section (DSATS) of SPE organizes the annual Drillbotics competition for the university teams to design and develop laboratory-scale drilling rigs. The competition requires each team to create unique downhole sensors to allow automated navigation to drill a directional hole. Student teams have developed new rig configurations to enable several unique steering methods that include a rotary steering system and small-scale downhole motors with a bent sub. The most significant challenge was creating a functional downhole motor to fit within a 1.25-inch (3.18 cm) diameter wellbore. Besides technical issues, teams must demonstrate what they have learned about bit/formation interaction and the physics of steering. Additionally, they must deal with budgets and funding, procurement and delivery delays and overall project management. This required an integrated multidisciplinary approach and a major redesign of the rig components. The University of Oklahoma team (winner) made significant changes to its existing rig to drill directional holes. The design change was introduced to optimize the performance of the bottom hole assembly (BHA) and allow directional drilling. The criteria for selecting the BHA was hole size, BHA dynamics, a favorable condition for downhole sensors, precise control of drilling parameters, rig mobility, safety, time constraints, and economic practicality. The result is an autonomous drilling rig that drills a deviated hole toward a defined target through a 2 × 2 × 1 ft (60.96 × 60.96 × 30.48 cm) sandstone block (i.e. rock sample) without human intervention. The rig currently employs a combination of discrete and dynamic modeling from experimentally determined control parameters and closed-loop feedback for well-trajectory control. As demonstrated during the competition, the research and development conducted by the team go well beyond the textbooks. The novelty of our design is the use of a small-scale cable-driven downhole motor with a bent sub and quick-connect type swivel system. This is intended to replicate the action of a mud motor within the limits of the borehole diameter. This article presents details of the rig components and their specifications, and the problems faced during the design, development, and testing. The paper demonstrates how a laboratory-scale rig can be used to study drilling dysfunctions and challenges. Building a downhole tool to withstand vibrations, water intrusion, magnetic interference, and electromagnetic noise are common difficulties faced by major equipment manufacturers.