The invention discloses a terminal emulation test system and a method for extending a terminal by utilizing the system, aiming at solving the problem existing in separate development of the emulation of each terminal currently. The system adopts three structures of a core processing engine, an external extension interface and an external extension describing, and realizes the emulation of various bank card acceptance terminals, such as ATMs, POS machines, etc. Furthermore, the emulation of terminals of other types can be extended conveniently. Simultaneously, comprehensive test tool supporting functions and a unified emulation using interface are provided. By adopting a layered frame structure, the system of the invention can simplify the development process, improve the reusability of software development and reduce the workload and difficulty of the development while extending different terminal types.