Closed loop identification of transfer function model for an unstable bioreactor is proposed based on an optimization method using either a step or a pulse response of PI/PID controlled bioreactor. A simple method is proposed for the initial guesses of the parameters of the first order plus time delay (FOPTD) transfer function model. A PID controller is designed for the identified model. Simulation study on the nonlinear model equations of an unstable bioreactor exhibiting multiple steady-states shows that the PID controller designed on the identified FOPTD model gives a good closed loop response similar to the one designed based on the linearized model from the nonlinear model equations.