A compact, 3-degrees-of-freedom (DoF), low-cost, remotely operated unmanned underwater vehicle (UUV), or MicroROV, is custom-designed, developed, instrumented, and interfaced with a PC for real-time data acquisition and control. The nonlinear equations of motion (EoM) are developed for the under-actuated, open-frame, cross-coupled MicroROV utilizing the Newton-Euler approach. The cross-coupling between heave and yaw motion, an important dynamic of a class of compact ROVs that is barely reported, is investigated here. This work is thus motivated towards developing an understanding of the physics of the highly coupled compact ROV and towards developing model-based stabilizing controllers. The linearized EoM aids in developing high-fidelity experimental data-driven transfer function models. The coupled heave-yaw transfer function model is improved to an auto-regressive moving average with exogenous input (ARMAX) model structure. The acquired models facilitate the use of the multi-parameter root-locus (MPRL) technique to design baseline controllers for a cross-coupled multi-input, multi-output (MIMO) MicroROV. The controller gains are further optimized by employing an innovative Marine Predator Algorithm (MPA). The robustness of the designed controllers is gauged using gain and phase margins. In addition, the real-time controllers were deployed on an onboard embedded system utilizing Simulink′s automatic C++ code generation capabilities. Finally, pool tests of the MicroROV demonstrate the efficacy of the proposed control strategy.