System modeling is a useful tool to configure a hydraulic system and assess its capability to achieve the designated functionality and performance before the system is physically built and becomes a common engineering design practice in many applications. This chapter introduces the basic methods for modeling hydraulic systems and illustrates how a system can be modeled using an example of a simplified valve-controlled hydraulic system. This chapter also discusses a few methods for analyzing the performance of a system, such as how a system block diagram and transfer functions can be used to represent a hydraulic system. In addition, it describes the characteristics commonly used to assess system performance.