This paper provides an identification method for three-parameter models i.e. first order with dead time models and second order with dead time models. The proposed identification method is based on step response and can be easily implemented using digital microprocessors. The proposed method first identifies the order of the plant i.e. first order or second order from the behavior of the plant with constant input. After the order of the plant is determined, a test step input is applied to the system and the three parameters of the plant are obtained from the corresponding response of the plant. The output of the plant need not to be zero when the test signal is applied. The efficacy of proposed algorithms is verified through simulation and experiment.