Disclosed are a portable terminal with a music performance function and a method for playing a variety of musical instruments. The method includes: selecting a particular piece of music and a particular musical instrument from the portable terminal, according to a user request, and executing a music performance mode corresponding to the selected musical instrument; detecting a first input signal input to a screen according to the selected musical instrument in the musical performance mode; determining, if the first input signal is detected, whether a second input signal for executing audio source data is detected; analyzing the first and second input signals, in association with each other; and outputting audio source data of the selected music, according to the analyzed result, via audio signals.