Interconnected power systems experienced a significant increase in size and complexity. It is computationally burdensome to represent the entire system in detail to conduct power system analysis. Therefore, the model of the study system must be retained in detail while the external system can be reduced using system reduction techniques. This paper proposes a measurement-based dynamic equivalent in order to increase both model accuracy and simulation speed. The proposed method uses a set of measurements at the boundary nodes between the study area and external area for model parameter identification. Case studies demonstrate that the measurement-based technique can capture the main system behaviors accurately and improve computational efficiency.