This paper describes the design details and the characterization of an all digital closed-loop (ADCL) Interferometric Fiber Optic Gyroscope (IFOG) Prototype with sine wave biasing modulation and an erbium doped fibre amplifier (EDFA) pumped by DFB laser emitting at 1549.0 run as a broadband Source. The output of demodulation circuit in the prototype, proportional to the applied rotation rate, was sampled by AD7714YN analog to digital converter (ADC) and operated in 16 bit resolution. Error voltage, generated by microcomputer-control led LTC 1667CG, 14 bit digital to analog converter (DAC), was sent to the phase modulator through a linear summing circuit, to make Sagnac Phase Shift zero, depending on the rotation direction. The averaged sensitivity of the ADCL-IFOG prototype in unit of error voltage applied to the phase modulator was calculated as 129.21 mu V/(degrees/h) which equals to a scale factor of 7.739 (degrees/h)/(mV) with a standard deviation of 0.71% for a range of 1-15270 (degrees/h) rotation rate, corresponding to a range of Sagnac Phase Shifts varying from 0.00115 (degrees) to 17.57448 (degrees). The maximum peak to peak noise and the bias stability of the prototype were determined as 3.88 (degrees/h) and 1.38 (degrees/h) at 23.0 degrees C, respectively.