The paper addresses the problem of directly estimating the parameters of a reduced order digital controller using a closed loop type identification algorithm. The algorithm minimizes the closed loop plant input error between the nominal closed loop system and the closed loop system using the reduced order controller. It is assumed that a plant model (if necessary validated in closed loop with the nominal controller) is available. One of the original features of this approach is that it can use either simulated or real data. The frequency bias distribution of the parameter estimates shows that the reduced order controller maintains the critical performance of the nominal closed loop system. A theoretical analysis is provided. Validation tests are proposed. Experimental results, obtained on an active suspension, illustrate the performance of the proposed algorithms.