The study is focused on the design of a simplified spool valve to be incorporated in the pressure compensator of a variable displacement axial piston pump in order to perform a comparative study with a commercial pump having a two-stage spool valve in its compensator. The design involves the evaluation of thespool size and selection of spring from static equilibrium conditions to satisfy cut-in and cut-off pressure. Following the development of a dynamic model of the system, a design sensitivity analysis of the spool valve has been carried out through simulation to identify the critical sizes of the parameters, which affect the pump performance. By systematic design, it is possible to have a single-stage spool valve-controlled pressure compensator that can produce a performance of the variable displacement axial piston pump at par with a similar commercially available pump.