This paper presents simulated and experimental test results of optimal control algorithm for an encapsulated ice thermal storage system with full capacity chiller operation. The algorithm finds an optimal combination of a chiller and/or a storage tank operation for the minimum total operation cost through a cycle of charging and discharging. Dynamic programming is used to find the optimal control schedule. The conventional control strategy of chiller-priority is the baseline case for comparing with the optimal control strategy through simulation and experimental test. Simulation shows that operating cost for the optimal control with chiller on-off operation is not so different from that with chiller part load capacity control. As a result from the experimental test, the optimal control operation according to the simulated operation schedule showed about 14 % of cost saving compared with the chiller-priority control.