A new usage of Superconducting Magnet Energy Storage (SMES), that is, on-line evaluation of dynamic stability of a power system by use of SMES is proposed. This paper shows the possibility of the proposed usage of SMES using an analog type power system simulator and a model SMES. The SMES, which is installed for power system stabilization, for example, can give a small continuous power modulation of known pattern with only a small influence on power system operating conditions. At the same time, the SMES can suppress the power oscillation by its power stabilizing control. Experimental results show that the dynamic stability margin of the power system can be evaluated by monitoring the small power oscillation of line power or generator output due to the SMES power modulation.