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Based on real-time phasor measurement and advanced power electronic devices, the paper proposes a novel scheme to build an interactive dynamic hybrid simulation system integrating physical analogue and digital software. A large-scale power system is simulated by software and interacts with the local power systems consisting of 4 generators in the dynamic simulation laboratory. The interaction between the virtual large-scale power system and the 4 generators is implemented by the real-time measurement and control of the boundary conditions. The interactive system is able to simulate large-scale power systems and avoid the drawbacks of software simulation. The key of the simulation system is real-time performance. The paper analyzes the technology feasibility of the system including real-time measurement, communication, simulation and control. Based on the advanced developments of technology, the hybrid simulation system is feasible.