Exploring on reliability modeling and analysis on a marine equipment in a dynamic environment is a meaningful and challenging issue, because the system commonly carries out the task at sea away from land and suffers a distinct influence of environment. Thus, a reliability model of a multi‐state repairable system operating in dynamic environment is developed by introducing the background of the marine power system in this paper. The novelty of the research lies in the modeling and computing methods are relatively innovative by employing the aggregated stochastic processes, Hadamard production and matrix‐analytic method. First, the working modes of the marine power system under several different kinds of conditions are introduced. Then, the evolution of both the system states and environment are described as discrete‐time Markov chains with multiple and different transition probability matrices. The failure probability and repair probability of components are also distinct in different environments. Furthermore, some performance indexes, especially the index relevant to the environment, are derived, respectively. Finally, the conclusion is obtained by a numerical example of the marine power system, which also illustrates the validity and applicability of the proposed model.