In hydraulic systems, flow control valve is used to regulate the flow of fluid to actuators by adjusting the valve opening. However, the inlet and the outlet pressures of the valve are not always remaining constant. Any change in pressure will alter the flow rate through the valve and alter the actuator speed consequently. Pressure compensated flow control valves are often used in hydraulic systems when accurate speed control is required under varying supply or load pressures. The basic structure of the pressure compensated flow control valve is by incorporating a compensating spool to maintain a constant pressure drop across the metering orifice. Under ideal circumstance, the actuator speed can be constant and controllable, regardless of load or system pressure changes. However, in practical applications, any system or load pressures variations will cause force unbalance on valve compensating spool and affect the control accuracy. The steady and dynamic response of the flow control valve plays an important role on hydraulic system behavior. Therefore, analyzing and understanding of the valve steady and dynamic behaviors is very important. In this study, the steady and dynamic performance of a pressure compensated flow valve is simulated numerically by solving the characteristic equations. The parameters studied in this research are biased spring constant, pre-compressed spring length, spool mass, and the damping orifice characteristics. The simulation results show that the flow force is identified as the key factor to affect the control accuracy. Increasing the spring constant as well as the pre-compressed spring length will increase the steady flow rate and reduce the transient response time. Decreasing the damping orifice opening or the discharge coefficient will increase the transient response time. The spool mass has practically no effect on the flow rate.