In order to realize modeling and dynamic analysis of a mechanical system containing rubber isolator, a parameter identification method of rubber hysteresis damping is investigated. Firstly, sine vibration test of rubber isolator is conducted so as to acquire the relationship between resilience force and displacement in different frequencies and amplitudes. Secondly, according to the principle of damper dissipation same energy in one vibration period, the resilience force is broken into spring force and damping force, which can be identified by a new approach called variable-rate stiffness and damping parameter identification. The relationships of elasticity coefficient and damping coefficient with variation of frequency would be obtained by this parameter identification method. Then, the above mentioned parameter identification results are applied into modeling and dynamic analysis of a shaft structure including the rubber isolators. ‘A big mass method’ is also used in the process of calculation response acceleration curve with variation of frequency at the position of centroid. The most acceleration reaches 11.79g at frequency of 100Hz. Finally, the sine vibration test of the whole structure is carried out and the distinctions of test result and calculation result are carefully compared. Experimental results indicate that the max error of calculation result is up to 9.2%, which has satisfied the requirement of engineering calculation. It has proved that correctness of this parameter identification method. Furthermore, application of this method will make the process of modeling and analysis of rubber isolator unification and standardization.