Control of a batch fluidized bed dryer is required in many industries. In this paper, the optimization and feedback control of material moisture content in a batch fluidized bed dryer are studied. The optimal operating conditions of the dryer have been found and a generic model control (GMC) strategy has been implemented to achieve a desired drying rate for wet materials. As it is usually impractical to measure moisture content directly, an extended Kalman filter (EKF) observer is used to estimate the moisture content on-line in order to detect the drying end-point and to provide a state estimate for feedback control. Studies show that the EKF observer and the GMC controller can provide satisfactory estimation and control of the particle moisture content even if the process model error is significant.