In hydraulic systems, the property of hydraulic fluid will have non-linear behavior change when the temperature and pressure of hydraulic fluid and the amount of dissolved and undissolved air vary in fluid, thus influence the hydraulic system performance. The property of hydraulic fluid was firstly studied and then the mathematical expression was constructed theoretically which showed hydraulic fluid effective density by using the pressure, temperature and air content parameters. The computation simulations of the hydraulic fluid non-linear characteristics were carried on by using the simulation program based on Matlab software. Meanwhile the key-factors affecting the hydraulic effective density and fluid bulk modulus were discussed. The study results have important theoretical and engineering significance and provided simulation foundation for designing hydraulic transmission systems with quick response, steady running and high accuracy. 