Abstract Blade tip timing (BTT) is a vibration measurement technique for blade health monitoring. Most of the existing BTT analysis methods are suitable for deterministic vibration signals but are ineffective for random vibration signals that often occur in practice. Statistical analysis of BTT data is significant for random vibration analysis and improving blade monitoring efficiency. This study proposes a compressive model for power spectral density (PSD) estimation and modal parameter identification. The efficiencies of three compressive sensing algorithms, including the least absolute shrinkage and selection operator (Lasso), nonnegative least squares (NLS), and nonnegative orthogonal matching pursuit, are compared. The effects of the duration of the signal and the frequency resolution on the quality of the estimated PSD and the identified parameters are discussed. According to the analysis, to obtain accurate damping ratios, it is recommended that the duration of the signal be greater than 3000 revolutions. A Q criterion based on the half-power bandwidth is proposed to determine the set of frequency resolutions. Numerical and field tests were conducted to verify the proposed method. The results indicate that the NLS algorithm is recommended to use. The root-mean-square errors of the identified natural frequencies and damping ratios obtained by the proposed method were 0.065 Hz and 0.023%, respectively. The proposed method was verified at different rotational speeds in a field test, demonstrating the capability of the method over a wide rotational speed range and providing more opportunities to detect blade damage.