A steam turbine generator is an electromechanical system which converts heat energy to electrical energy. In this paper, the modelling, design and analysis of a simple steam turbine generator have done using Matlab/Simulink Toolbox. The open loop system have been analyzed to have an efficiency of 76.92 %. Observer based & linear quadratic regulator (LQR) controllers have been designed to improve the generating voltage. A comparison of this two proposed controllers have been done for increasing the performance improvement to generate a 220 DC volt. The simulation result shows that the steam turbine generator with observer based controller has a small percentage overshoot with minimum settling time than the steam turbine generator with LQR controller and the open loop system. Finally, the steam turbine generator with observer based controller shows better improvement in performance than the steam turbine generator with LQR controller.