In this paper, a localization algorithm and an autonomous controller for PETASUS system II which is an underwater vehicle-manipulator system, are proposed. To estimate its position and to identify manipulation targets in a structured environment, a multi-rate extended Kalman filter is developed, where map information and data from inertial sensors, sonar sensors, and vision sensors are used. In addition, a three layered control structure is proposed as a controller for autonomy. By this controller, PETASUS system II is able to generate waypoints and make decisions on its own behaviors. Experiment results are provided for verifying proposed algorithms.