The problem of vibration reduction in helicopter fuselages using the concept of active control of structural response is addressed. When the large size of the coupled gearbox-flexible fuselage system dynamics is considered, first a balanced-realization-based order reduction is employed to reduce the size of the problem. Then using the reduced-order model, a closed-loop controller is designed to minimize the vibratory levels in the fuselage with the constraint that the controller ensures stability of the original full-order system. The controller design is based on the concept of disturbance rejection by the internal model principle. When a four-block representation of the problem and doubly coprime factorization theory is employed, a stable controller is designed for this multi-input/multi-output control problem. It is observed that this controller yields a closed-loop transfer function, which rejects the external disturbance not only at the desired frequency but also in its neighborhood. In addition, contrary to open-loop control, the present technique of closed-loop control reduces the vibratory levels both in the fuselage and the gearbox. The influence of sensor locations on vibration minimization has also been highlighted.