Numerically Controlled Oscillator (NCO) is an important component in many digital communication systems such as digital radio and modems, software defined radios, digital down/up converters for cellular and PCS base stations etc. A common method for digitally generating a complex or real valued sinusoid employs a look-up table based scheme. The NCO design is first simulated and optimized on the software tool Xilinx 10.1 and then coded in VHDL for hardware realization. The designs are tested on Xilinx Spartan2 FPGA development platform. The test results are matching with theoretical and simulated results.