In this article, a design method for a PID controller is proposed based on IMC principles for control of open loop integrating and unstable first-order processes with time delay. The design is based on H₂ optimal closed-loop transfer function for set point changes and step input disturbances. The method has one tuning parameter, and systematic guidelines are provided for the selection of this tuning parameter based on peak value of the sensitivity function. The performance of the designed controller is verified on various integrating and unstable processes, and it is observed that nominal and robust control performance is achieved with the proposed design method. Improved closed-loop performance was obtained when compared to other methods recently reported in the literature. Further, the proposed method provides good closed-loop performance even when there are large uncertainties in the process parameters.