A discrete state event-driven (DSED) simulation method for simulation of a power electronic system is disclosed. With respect to continuous states and discrete events in the power electronic system, the method includes: numerical integration of the continuous states with a flexible adaptive (FA) algorithm having both variable step-size and variable order; and location of the discrete events with an event-driven (ED) mechanism, in which active events are picked out and pre-scheduled before their occurrence while passive events are located by iterative search. The proposed to DSED simulation method can achieve significant improvement in simulation efficiency, with remarkably reduced computational costs at the same level of numerical accuracy. The proposed DSED simulation method is particularly applicable for complex power electronic systems with modular combined topology and high switching frequency.