Based on the analysis of six kinds of working points, the process function of torpedo thermal power propulsion system is solved. The results show that the process transfer function is approximate to inertial link. PI control algorithm is presented and its parameters are deduced. The algorithm can not only control the output variables, but also can monitor the intermediate variable. Closed-loop control system model is established. Variable speed characteristics of torpedo at constant depth and steady speed characteristics in depth-changed process are simulated by MATLAB. Simulation results indicate that the system has satisfactory dynamic performance and the control quality performs well.