The application of electric power, which acts as a pillar energy and economic artery in modern society, is one of the most important symbols of the level of development and comprehensive national power of a country. Var is a crucial factor for the design and operation of AC power systems, and is closely bound up with the safety, stabilization, and economical operation of power systems. With the development of electrified railway, the importance of the dynamic var compensation for traction power supply systems of electrified railway becomes more and more distinct. Developing the var compensation strategy vigorously has important senses in theory and practice. In this article, synthetically considering technique and economic leval of power systems in our country, parameters modeling and design and verification and specific engineering application of a var compensation method are presented. This method is a preferable one for resolving undesirable effect on power systems from traction power supply systems of electrified railway, especially having dynamic and real time characteristics of var compensation.