A simple yet effective method for designing decentralized PID controller, which is based on dynamic interaction analysis and internal model control principle, is proposed. On the basis of structure decomposition, the dynamic relative interaction is defined and represented by the process model and controller explicitly. Using the initial controllers designed for the diagonal elements, the multiplicate model factor is derived, and then simplified to a pure time delay function at the neighborhood of each control loop critical frequency to obtain the equivalent transfer function for the particular control loop. Consequently, appropriate parameters of individual controller are determined by applying the IMC-PID tuning rules for the equivalent-transfer function. Simulation results for a variety of 2 X 2, 3 X 3 and 4 X 4 systems show that the design technique results better overall control performance than those of existing design methods. (c) 2006 American Institute of Chemical Engineers AlChE J, 52: 3852-3863, 2006.