Fuzzy State Space Model (FSSM) is a new modeling technique, which was developed for solving inverse problems in multivariable control systems. In this approach, the flexibility of fuzzy modeling is incorporated with the crisp state space models proposed in the modern control theory. The vagueness and uncertainty of the parameters are represented in the model construction, as a way of increasing the available information in order to achieve a more precise model of reality. Some important properties and characteristics of FSSM were also investigated. In this paper, our discussion is focused on the formulation of the FSSM that provides algorithms for optimization of input parameters directly. The effectiveness of this modeling approach is illustrated by implementing it to the state space model of a furnace system of a combined cycle power plant. The results obtained in this application demonstrate that the proposed new modeling approach is reasonable and provides an innovative tool for decision-makers.