This paper addresses the problem of state assignment for Finite State Machines (FSM). This is an important problem in digital system design where added functionality often comes at the expense of a larger (and slower) FSM to control the system. We present a new scheme to solve the graph embedding problem which is the main step in the state assignment process. This new approach places the graph in a two-dimensional array (grid) while minimizing the total edge length, and then maps this two-dimensional array into an n-dimensional hypercube with dilation of at most 2. Experimental results are presented and compared against those of NOVA. These results demonstrate the effectiveness of the proposed approach.