The alternating current arc furnace is an unbalanced, nonlinear and timevariant load that produces higherorder harmonics during the steelmaking process. The harmonics affect the quality of electric energy in public supply network. Harmonic analysis on arc furnace electrical system is beneficial to adopt the good measure to restrain the harmonics. This paper builds the simulation model of alternating current arc furnace on the basis of the mathematical model of arc resistance by making use of power system blockset and fundamental blockset of MATLAB 6.5/Simulink. By making simulation the results of harmonics analysis on arc furnace system show that 2nd to 7thorder are the main harmonic components in harmonic current of arc furnace. The results are about
the same with that measured by a harmonic analyzer.