The paper focuses on analysis of aeromechanical instabilities, specifically ground resonance in helicopters and active control methods for improving the existing stability margins. First, a simplified model of coupled rotor-fuselage system with translational fuselage degrees of freedom and blade lead-lag degree of freedom is considered. Anisotropy is introduced through stiffness variation between blades. Depending on the configuration, appropriate methods are used for stability analysis and to determine frequency coalescence. Second, similar analysis is extended to a model with fuselage pitch, roll and blade flap, lag degrees of freedom and incorporates wake model. The analysis brings out effects of collective pitch and lock number on aeromechanical instabilities with the inclusion of wake model. Active control strategy using pole placement technique and Linear Quadratic Regulator(LQR) is applied to the periodic system. Stabilization is done by increasing the aerodynamic damping through control input given either as cyclic or collective pitch. Copyright © 2015 by ASME.