The invention related to a method and circuit that is used to compensate for S-parameters of a passive circuit which do not satisfy passivity. The method includes the following steps: (1) getting S-parameters which do not satisfy passivity, these S-parameters being composed of an S-parameter matrix S; (2) computing matrix [S×S′], wherein matrix S′ is a complex conjugate transposed matrix of the S-parameter matrix S; (3) computing the eigenvalues of the matrix [S×S′], and choosing an eigenvalue Ψ whose real part real(Ψ) is the biggest; (4) computing a compensating value ξ, the compensating value ξ being equal to real(Ψ)1/2×(1+ε), wherein the ε is a very small positive number; and (5) dividing each of the S-parameters by the compensating value ξ to get the compensated S-parameters.