Nowadays, the interconnected power system stability including the frequency stability is one of the most important research topics. The frequency stability of interconnected power systems depends on the power systems’ parameters and the active power balance. The total inertia constant and the damping coefficient have the most effects on the frequency stability. Reducing the total inertia usually increases the frequency oscillations and as a result, the transferred power between the different areas would be oscillatory. The most important reason of the total inertia reduction is the increase of renewable power generation in modern power systems. In order to overcome the problems resulted from the inertia reduction, new control approaches based on the real data of the system are in demand. Considering the recent advancements on PMUs and wide-area monitoring systems (WAMS), it is possible to design and implement online control methods in modern power systems considering online estimation of both total inertia and damping parameters. In this thesis, a novel method to online estimating the total inertia is proposed. In the proposed method, the sub-state space is firstly estimated using N4SID algorithm and the available data from PMUs. Based on the estimated sub-state space, the state space model of the system is identified. Next, after converting the discrete model of the state space to continues state space model, the transfer mode of the system is obtained. By applying the reduction technique, the first order transfer function of the swing equation is achieved resulting in obtaining the required parameters. The results verify that N4SID has good ability to estimate the synchronous generators inertia with high accuracy. It has been proven by different scenarios the proposed method is reliable, fast, and noise-independent. Keywords: Frequency response, inertia constant estimation, WAMS, PMUs, N4SID method.