This letter proposes a design method of a compact embedded hydraulic power unit (HPU) for a bipedal robot and a controller to regulate the supply pressure. The HPU consists of an integrated pump-motor unit. The unit is immersed in hydraulic oil for efficient space utilization and heat dissipation from the motor. This HPU design is analyzed to establish a relationship between the thermal variables and the motor design parameters such as gap radius and wire radius via its thermal and electrical modeling. Through this analysis, the design parameters of suitable pump-driving motor are chosen. This letter also proposes a control method for the HPU to regulate the supply pressure while minimizing the energy loss caused by the bypass through a pressure-regulating valve. The HPU is mounted on top of the bipedal robot platform, LIGHT, with twelve degrees of freedom actuated by the proposed HPU. Finally, the durability of the designed HPU is demonstrated through a long-term driving test at a high pressure. Furthermore, air-walking and squat motion experiments are conducted with the bipedal robot to demonstrate the capabilities of the HPU and its controller.