The problem of pole placement in a specified circular region for discrete two-time scale system is considered. An algorithm for pole assignment in a specified circular region using a bilinear transformation onto the unit circle is presented for discrete two-time scale systems. We decompose the discrete regulator problem into two subsystem discrete regulator problem and then they are solved for optimal pole assignment in specified circular region. A fifth-order steam power system model is worked out to demonstrate the analytical development. © 1999 EUCA.