The present work presents the development of an automatic control system and the investigation of the flight dynamics of fixed-wing micro air vehicles (MAVs) with vertical take-off and landing (VTOL) capabilities. Specifically, the flight transition maneuver in the vertical plane (vertical-horizontal and horizontal-vertical) is studied in detail. The problem of transition between horizontal and hover modes is discussed. The development and evaluation of a VTOL MAV called Mini-Vertigo 2 (MV2) is presented. A non-linear longitudinal dynamic model of MV2 flight is derived. Semi-empirical aerodynamic formulas for thrust, lift, drag and pitching moment based on wind tunnel testing are applied to the dynamic model. Nonlinearities during transition to/from hover are addressed. Using the developed dynamic model a numerical vehicle dynamic simulator is developed. Simulations are performed to investigate MAV design tradeoffs. Tradeoffs between a piecewise hybrid controller, a strictly open-loop controller and a nontraditional feed-forward controller are each considered. A newer feature of the MV2 autopilot is discussed and flight test data is presented.