AC motors, especially the squirrel cage induction motors have the advantages of simple structure, good reliability and low cost. They are more suitable to be used as electrical dynamometers to provide dynamic load for bench test systems. But, the speed and torque of induction motors are not easy to be controlled accurately. In this work, an electrical dynamometer based on the induction motor is proposed. In order to get better control performance of torque and speed of induction motor, an improved direct torque control method (DTC) is also developed based on the space vector modulation (SVM) technique. The performance of the proposed dynamometer system is validated in the Matlab/Simulink platform. The simulation results show that the new dynamometer has good torque and stator flux response. And the torque and stator current ripples of it are reduced significantly compared with using the conventional DTC method.