How to acquire the accurate equivalent network of external system in the interconnected power grid has always been a challenging issue in the fields of both academic and engineering. This paper proposes a new method for online equivalence of the external network based on the measurement information of the internal network. Firstly, it builds an equivalent network of the external system, including the coupled branches between each of the boundary node, the equivalent generators and the equivalent lines from corresponding boundary nodes to them. Then, based on the SCADA (Supervisory Control and Data Acquisition) measurement information, an optimization model to estimate the parameters of the equivalent network is constructed, with the minimization of the mismatch between the boundary’s measurement and the calculation value of the equivalent network being the objective and the parameters of each line of the equivalent network within the reasonable range being the constraints. In order to reduce the calculation scale, measure is adopted to remove the coupled lines whose electrical distances (or impedances) are larger than a relative big threshold. The impedance range of each line in the equivalent network is determined by ward equivalent method under the condition of maximum and minimum operation mode. The model is solved by interior point method, which owns the satisfactory convergency performance. The solution of the model makes each of the calculated value of the equivalent network at the boundary node closest to the measured value, while all the parameters of the equivalent network within a practical range. The results of an example demonstrate the validity and effectiveness of the model and method proposed in the paper.