The invention discloses a real-time online instrument verification and diagnosis method through a least square algorithm. The method comprises the following steps: S1, establishing a flow network model; S2, iterating field actual measurement data, and calculating and determining parameters in the model through a least square algorithm to enable the model to be available; S3, restarting the above steps regularly, and optimizing parameters; S4, verifying the sampled variables one by one by utilizing the model in a stable flow field state; S5, after the suspected failure point is eliminated, performing inverse iterative operation by using other data, and reversely deriving a theoretical calculation value of the suspected failure point; S6, eliminating process condition changes, performing comparative analysis on the actual instrument signal by using the theoretical calculation value, realizing verification and fault diagnosis, and determining a signal health level; and S7, recording a sampling signal and a calculation signal according to the measurement time, and giving an alarm and positioning a fault according to a deterministic fault diagnosis condition. Instrument faults can be found and reported early, results can be corrected intelligently, and work efficiency is improved.