In order to analysis and improve hydraulic excavator system as whole, the simulation modeling of excavator hydraulic system was established based on ADAMS environment. The simulation model was dynamically analyzed under noload and load condition. Through comparison of the simulation curve and actual working condition, the effectiveness of the established model was demonstrated. The excavator hydraulic system was optimized based on simulation model. Checking computations prove that working efficence is effectively improved after optimization of the excavator hydraulic system, which has a good application prospect.