The steam generator (SG) is a crucial component of the AP1000 pressurized water reactor (PWR) nuclear power plant systems. The operational stability of SG must be considered for entire nuclear power system’s safety and availability. The presence of steam bubbles under the water level in the steam generator causes the shrink and swell phenomenon. It makes the water level control problem of SG complex. Therefore, a relatively simple lumped parameter model that agreed well with experimental data of SG was presented. First, a moderately complex fourth order nonlinear mathematical model of AP1000 U-type steam generator was established based on Åström-Bell model. Second, the simulation platform was built and then the simulation was conducted in MATLAB/Simulink environment. Finally, the model parameters were obtained from estimating from the standard AP1000 test data and the simulated results were compared with the standard test data. The results showed that the model could capture the dynamic fluctuation of water level in AP1000 SG over a wide operating range.