Beside the major objective of providing congestion control, achieving predictable queuing delay, maximizing link utilization, and robustness are the main objectives of an active queue management (AQM) controller. This paper proposes an improved queue dynamic model while incorporating the packet drop probability as well. By applying the improved model, a new compensated PID AQM controller is developed for Transmission Control Protocol/Internet Protocol (TCP/IP) networks. The non-minimum phase characteristic caused by Pade approximation of the network delay restricts the direct application of control methods because of the unstable internal dynamics. In this paper, a parameter-varying dynamic compensator, which operates on tracking error and internal dynamics, is proposed to not only capture the unstable internal dynamics but also reduce the effect of uncertainties by unresponsive flows. The proposed dynamic compensator is then used to design a PID AQM controller whose gains are obtained directly from the state-space representation of the system with no further gain tuning requirements. The packet-level simulations using network simulator (ns2) show the outperformance of the developed controller for both queuing delay stability and resource utilization. The improved underlying model leads also to the faster response of the controller. Copyright (c) 2013 John Wiley & Sons, Ltd.