Abstract: Based on intrinsic nonlinear characteristics of CO₂ arc welding with short circuit transient, the digital simulation mode for the system consisted of inverter and nonlinear load is developed with MATLAB. The simulation mode directly indicates the features of the system by means of visual modeling graph. Waveform of main state variables in dynamic process of CO₂ arc welding is given by simulation. And it is verified by experiment results which are obtained from the analyzer Hannover-XII made in Germany. MATLAB is a powerful tool for improving performances of arc welding inverter, and it is a new method for quantitative analysis in the dynamic process of nonlinear arc welding system.