It has been considered that the purpose of the automatic steering system of ships is to maintain ships' course as far as possible. However, the author would like to point out that this definition is not proper, because, there might be reasonable limitation to the rudder angle in relation to the speed loss, that is : if an excessive rudder angle was taken to maintain the ship course too much strictly, it will induce considerable power loss. The real purpose of applying the automatic steering to a ship in a seaway is to bring her from one side to the other end of a route as fast as possible within a limited cost. Therefore, the author prefers to define the purpose of an automatic steering to be “to minimize the increase of resistance in a wide sense under the disturbance of wind or waves in the ocean.” Making the use of this definition, the author obtained the performance function of the automatic steering system of ships at sea, namely : J =θ²+λδ² where θ² : mean square of course error. δ² : mean square of rudder angle. λ : a constant which shows the weight of above two values. A full scale measurement of yawing motion is also carried out on a cargo ship, “M. S. Florida-Mar” in Pacific Ocean to obtain the spectrum of angular rate which is affected by disturbance caused by wind or waves. Applying these results, some suggestions are obtained to improve the automatic steering system of ;ships, for example, 1) The rudder angle ratio has to be chosen not too large. 2) The weather adjustment of conventional system is injurious and cannot keep the rudder angle small, because it necessarily requires rather deep rate control. 3) First of all, we should pay attention not to make the rudder too much sensitive to each wave. and so on.