The aim of this study is to suggest a reliable low cost smart system for automating the heat treatment process. This system will reduce human direct interaction. The Fuzzy-PI control algorithm combined with ON/OFF algorithm was designed to automate the whole system operations. The overall automated furnace system includes control unit, algorithm, sensor and drive circuit was simulated in MATLAB/Simulink, tested for different heat treatment techniques. Normalizing and annealing heat treatments were performed on AISI1040 steel using a traditional method as well the embedded system with Fuzzy-PI control. The results show that the suggested Fuzzy-PI control algorithm and whole furnace system can reproduce any desired and arbitrary heat treatment technique curve with minimum error. Heat treatments resulted in significant changes in microstructure and hardness of the AISI1040 steel under investigation. In addition, there is no significant differing between the microstructure and hardness of AISI1040 steel after traditional and automated heat treatment processes. Where the hardness after traditional normalizing heat treatment was 234 HV, while it was 232 HV after automated normalizing heat treatment system. This confirms that the proposed automatic control system for heat treatment processes is reliable and useful in reducing the cost and time spent in these processes.