The relative phase position of AC voltages and currents in different parts of an electric power system determines the stability and the dynamic performance of the system. The introduction of phasor measurement units (PMUs) in power systems significantly improves the possibilities for monitoring and analyzing power system dynamics. In this paper a Recursive DFT algorithm is adopted for the development of PMU design with the help of Digital Signal Processor (DSP), Global Positioning System (GPS), voltage & current transformers and additional circuitry to get the benefits like reduced manufacturing cost, improved measurement accuracy and increased timely information. Once the desired functionality has been captured and simulated, using MATLAB/Simulink/Embedded Target for TI C2000 DSP environment code can be generated for the DSP. The developed Phasor Measurement Unit (PMU) provides phasor information (both magnitude and phase angle) in real time.