To measure the nonlinear impedance of interdigital electrode-solution system, a novel method based on free damped oscillation is proposed. A high valued active inductance with adjustable negative resistance is constructed by an operational amplifier. A second order oscillation system for measurement is then set up by connecting the active inductance with the device under test. The active inductance is designed to be around 470H to meet the measurement requirements of low frequency. The negative resistor is utilized to adjust damping coefficient of the oscillation system in order to obtain enough number of ring-down oscillation cycles for parameter estimation. The free damped oscillation signal of the oscillation system is obtained under square wave voltage excitation. After processed by Hilbert transform, the instantaneous capacitance and resistance can be calculated simultaneously to implement nonlinear impedance measurement. The operational availability of the proposed method is verified by experimental results of commercial available resistors and capacitors. The impedance nonlinearity of a gold interdigital electrode immersed in KCl solutions of different concentration is tested and compared with that obtained by sweep-amplitude sinusoidal excitation methods. The results indicate that the proposed method can successfully obtain impedance nonlinearity in half of the square wave period.