Power system state estimation is the important basis of the advanced applications in the power system monitoring, operation and control. The unique ability to calculate synchronized phasors at high precision makes the phasor measurement unit (PMU) an important measuring device to improve the accuracy of state estimator. In this paper, under given placement of PMUs in the power system, the linear model of state estimation is proposed to show the important contribution of PMU measurements to the power system state estimation along with the bad data detection and identification. The effectiveness of the proposed state estimation algorithm is validated using standard IEEE 14 bus test system.