In this paper, a servo filter design for the gimbal engine actuator system of KSR-III(Korea Sounding Rocket-III) is considered. A reasonable filter structure is determined based on the actuator analytic models. The servo filter consists of a 2-nd order lowpass filter and a 1-st order compensator. The lowpass filter is required to protect the actuator from high frequency vibration, and the compensator to enhance the resulting stability. A Butterworth type servo filter is considered as the simplest one. The final servo filter type is determined by evaluating simultaneously both high frequency gain reduction performance and the corresponding KSR-III stability margin. Consequently it is revealed that a notch type servo filter located on the error between command signal and feedback signal in the control loop is very effective. Later, based on the proposed servo filter type, an onboard servo filter hardware of KSR-III will be designed and tested.