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This paper presents constructing Lyapunov function of power system for estimating transient stability considering with load dynamics characteristics. An induction machine is treated as a representation of dynamic load. In the composition process of the proposed Lyapunov function, the slipping dynamic characteristic of the induction machine is implicitly expressed in the swing equation of power systems. As a result, the dynamic characteristic of an induction machine becomes equivalent to a synchronous machine with a voltage adjustment mechanism to which a dissipation function is added. Using this proposed system description, the Lyapunov function is composed by the state function method, which is based on an expanded energy function. The effectiveness of the proposed Lyapunov function is verified numerically for multimachine power systems with induction machine load.