Now a days as far as the speed of the processor is concerned, a new trend of design philosophy in the market is the use of reconfigurable hardware i.e. by using FPGA.(Field Programmable Gate Arrays). This paper deals with the construction of ALU,Logical unit and rotate unit and implemented using Xilinx 9.2 i. Instructions implimated by the individual module are simulated and synthesized by using VHDL and SPARTAN III FPGA board for design purpose, parallelism approach of designing is used in which use of minimum number of combinational circuits and maximum use of sequential circuits for avoiding delay. The instructions implemented are eight by arithmetic unit, logical unit implementsseven instructions. The designed units are recombined with other modules for construction of a 8- bit microcontroller, using FPGA for the improvement in speed.