The invention provides a parameter identification method based on graph theory and a device. an equation only comprising reactance parameters is established based on the graph theory; constrained conditions of observability of single power grid section parameters are determined; PMU measurement is adopted for parameter estimation for the devices which are equipped with PMU measurement; two-step parameter estimation is executed on the basis of residual error for the devices which are not equipped with PMU measurement. The pre-estimation of parameter values is quick and accurate; by means of the method, effective identification of high voltage loop grid parameters is achieved; suspicious device parameters can be accurately positioned so that the power grid technical data quality is improved and the practical level of electric power system network analysis is increased.