Modern computing technology allows the real-time generation of optimal trajectories for tethered satellites. An architecture that implements a closed-loop controller with a nonlinear state estimator using a subset of available measurements has been demonstrated for accurately deploying a tether for a rendezvous application. This strategy allows the controller to adapt to large disturbances by recalculating the entire trajectory to satisfy the mission requirements, rather than trying to force the system back to a reference trajectory computer offline.