An extended self-organizing map (ESOM) network, which consists of a self-organization phase and an optimization phase, was recently developed to construct a local model network (LMN) automatically using the plant data. However, this previous result suffers two drawbacks: (1) increased computation time in the self-organization phase as the number of local models increases, (2) lack of checking stability conditions for both local models and LMN. To overcome these problems, an improved algorithm for the ESOM network is developed in this paper by employing a competitive learning algorithm for data clustering in the self-organization phase and parametric constraints are formulated in the optimization phase to handle the stability of local models. In addition, the global stability of LMN is addressed. With LMN constructed by the ESOM network, it serves as a basis for building a nonlinear controller that combines several local controllers through the weighting functions obtained by the ESOM algorithm. Literature examples are used to illustrate the proposed ESOM-based modeling and controller design method.