This paper describes a tracking control strategy for an underactuated autonomous underwater vehicle (AUV) on a two dimensional plane (ℜ²). Based on a smooth, inertial, 2D reference trajectory curve, the proposed algorithm uses vehicle dynamics to generate the reference orientation and body-fixed velocities. Following these, required error dynamics are developed. Error dynamics are then stabilized using inverse dynamics control strategy, forcing the tracking error to an arbitrarily small neighborhood of zero. Circular path, as a constant velocity reference trajectory, has been chosen for simulation studies. Simulation results are included to demonstrate the tracking performance of the controller.