Abstract In this research, a new parameter estimation technique for determining the bus admittance matrix (Ybus) is proposed to further calibrate power system models. Ybus estimation is done using recorded PMU synchrophasor measurements. The approach proposed in this research is based on recognizing that bus injection currents Ibus can be viewed as signals produced by a random process. In this manner, the corresponding bus voltages Vbus are also stochastic signals that are related through a cross-covariance matrix to the vector Ibus. Using estimation techniques developed for statistical signal processing, the cross-covariance matrix is shown to be Zbus. Research done previously in this area requires the prior knowledge of the electrical interconnection as well as full availability of PMU measurements. This method does not depend on prior knowledge of the electrical interconnection between the buses. It extracts the electrical interconnection and the parameters of the network model in the form of Ybus. It also does not require full availability of PMU measurements at each bus in the system. It estimates the partial Ybus based on the available PMUs.