In order to decrease the influence of installation eccentricity on gear error evaluation and to raise its accuracy, a compensation algorithm for installation eccentricity is proposed and a compensation model of installation eccentricity is established. A new installation eccentricity parameter identification method determined with involute equations is also raised. Installation Eccentricity parameters are gained through measuring points on involute profile with the method of unconstrained parameter identification. Taking involute profile evaluation as an example, the eccentricity compensation model is introduced into the error evaluation of CNC Gear Measuring Center. The experiment shows that the compensation model raised in this paper can compensate for evaluation results of the involute gear whose eccentricity value is within 2/3 of the total measurement range of the probe and lead it into the non-eccentricity condition, and the most installation eccentricity value that can be compensated in the experiment is 300 μm. The proposition of this compensation method not only improves the accuracy of gear evaluation, but also lowers the requirements on installation accuracy of the gear.