In core based design (i.e. System on Chip) testing, IEEE 1500 standard has become a widely used option because of its completeness and easy to use approach, but this standard is only supported in the test mode as it stays transparent in the functional mode. In this paper, a proposed method to enhance the IEEE 1500 standard for functional testing in order to increase observability during functional test is discussed. As a case study, the proposed enhanced IEEE 1500 standard is implemented and validated on SAYEH processor in order to test it using embedded Software Based Self-Testing (SBST) technique. The case study demonstrated that the modification to the IEEE 1500 standard enables it to be used for functional testing, with increased observability. © 2013 IEEE.