The design of a 5 DOF (pitch, roll, yaw, heave and sway) dynamic test rig serves the purpose of estimating the aerodynamic derivatives of flight vehicles of any configuration. A mathematical model was developed which incorporates the 5 DOF in flight vehicle motion, in which equations of motion are developed using matrix and vector approach. The rig aerodynamic characterization is done using first principle. The entire design, modelling and fabrication of the dynamic test rig are done at Flight Lab, IIT Kanpur. Some parts of the rig assembly have been fabricated with the help of composites. The rig is also instrumented with different electronic components to acquire data while carrying out experiments. A scaled down delta wing model was fabricated to study the simulation and estimate its flight parameters using the dynamic test rig. Wing tunnel testing of the model gave static parameters and control derivatives while the dynamic parameters are estimated using analytical and empirical methods. The behaviour of the aircraft model is studied coupled with the rig system by simulating the model in wind tunnel. The data acquired is then used to estimate the aerodynamic parameters of the aircraft model. Maximum likelihood method is used to minimise the error in estimating the values of parameters.