In this paper a method is presented that allows for bias compensation of low-cost MEMS inertial sensors. It is based on the use of two sets of inertial sensors and a rotation mechanism that physically rotates the sensors in an alternating fashion. After signal processing, the biases of both sets of sensors are estimated and compensated for, resulting in a virtually bias free inertial sensor. A demonstrator has been build. First results with a test of the demonstrator in an airborne application show that the bias of low-cost MEMS gyroscopes can be reduced to less than 20 deg/hr. Further improvements up to a 2 deg/hr level are demonstrated in the laboratory. Lab-tests have shown that the bias of low-cost accelerometers can be reduced to below 0.1 mg.