Vibration of a wind turbine tower is related to fatigue wear, influencing reliability of the whole structure. The current paper deals with the problem of Linear-Quadratic-Gaussian (LQG) tower vibration control using specially designed and built simulation and laboratory tower-nacelle models with a horizontally aligned, magnetorheological (MR) damper based tuned vibration absorber located at the nacelle. Force excitation applied horizontally to the tower itself, or to the nacelle, is considered. The MR damper LQG control algorithm, including the Kalman state observer and LQR (Linear-Quadratic-Regulator) controller is analysed numerically and implemented on the laboratory ground, in comparison with the system with a deactivated absorber. Simulation and experimental results are presented.