A power system observability judgment method by considering the transformer tap position estimation includes dividing a maximum observable island, dividing the island, determining the island observability type, judging the observability when a tap position estimated transformer is located between two islands, and judging the observability when the tap position estimated transformer is located in one island. Compared with the prior art, the method has the advantages that the system observability is determined according to a state estimation starting manner, the types of the islands of two sides of a transformation ratio estimated transformer or the located island and the transformer branch measure configuration situation, the numerical calculation is omitted, and the method is convenient and easy to implement, accurate and reliable as compared with a traditional algebraic method.