The invention provides a unit speed regulation system control parameter setting method considering frequency modulation and stability constraints. The method comprises the following steps: S1) carrying out analysis on stability of a possible isolated-network-operation hydropower unit speed regulation control system; S2) obtaining a range of control parameters with primary frequency modulation performance constraint of a unit being taken into consideration; S3) under the premise of meeting small disturbance stability, giving a range of control parameters of the unit speed regulation system; S4) obtaining unit prime motor and speed regulation system measured parameters through actual measurement modeling, and obtaining overlap based on the ranges of the control parameters and applying the data to simulation analysis verification instances of the setting method; and S5) for a primary frequency modulation parameter setting range and a small interference stability parameter stability range, carrying out overall consideration, and finally, obtaining a parameter value range capable of meeting both frequency modulation performance requirements and small interference stability requirements, and carrying out setting on the unit speed regulation system model parameters. The method can obtain parameter values meeting both requirements under the premise of meeting double-term index requirements.