A new method for estimating the moment of inertia of engine generator set was proposed in this paper, which was defined as Governor Sensitivity Test Method (GSTM). In this method, the moment of inertia of engine generator set was estimated by means of measure transient speed change of engine generator set when the engine load increases suddenly. In the present, there have been some methods for estimating the moment of inertia of engine, such as, Additional Mass Method, Running Down Test Method and Accelerating- Decelerating Method Under No Load. These methods for estimating the moment of inertia of engine generator set all have shortcomings on accuracy or operability. These shortcomings have been overcome by using the GSTM method proposed in this paper. It is easy to operate, and the factors affecting estimation errors are small. In this paper, the basic principle of the GSTM method was discussed. The factors affecting estimation errors ware analyzed. An example of calculating the moment of inertia of an engine generator set using the GSTM method was presented. The result of calculating the moment of inertia of engine generator set was used to simulate the transient speed response of an engine generator set. The GSTM method was verified to be practical by comparing the results of simulation and experiment.