Large vibration of a rotor-bearing system excited by unbalance of rotor shaft or external forces can deteriorate the performance and shorten the lifetime of the system. The hydrodynamic bearing can provide desirable damping for a rotor-bearing system. In order to fully utilize the function of the hydrodynamic bearing for vibration reduction, a state-space technique is developed to identify the parameters (stiffness and damping) of the linearized hydrodynamic bearing. The eigensystem realization algorithm (ERA) is adopted to find the discrete state space model of system. It is shown that the ERA approach can be a very effective way for identification of the rotor-bearing system. The discrete state space model is further transformed to the continuous model that can be utilized to obtain the coefficients for the hydrodynamic bearing system. By comparing the output signal of the identified system and the nonlinear rotor-bearing dynamic model, the identification accuracy is verified. More simulation results on different values of eccentricity are also plotted to show the characteristic of a hydrodynamic bearing.