A method to estimate line parameter of power grid based on innovation graph is proposed. This method identifies network parameter error location according to feature that the innovation values of the branch with parameter error and the correlated branches are larger than other branches in the network, and then estimates the real parameter value based on the Kirchhoff's voltage Law by using PMU measurements. This method can identify and estimate network parameter errors quickly, simply and effectively. The calculation of the example in IEEE-5 bus system demonstrates that this method can estimate network parameter errors exactly, and this example shows that this method is also effective when network parameter errors, bad data and topology errors take place at the same time.