In this research, a power-assisted steering system is modeled as a part of a full vehicle dynamic model. The dynamic model of the steering system incorporates hydraulic and dynamic relations between major parts of a steering system, such as steering column, control valve, rack and pinion gear. Through an experimental setup of the steering system, the steering system model is validated. The steering model is included in a full vehicle dynamic model of a car, where kinematic relations between steering and suspension system are defined, and various simulations are performed to evaluate the performance of steering system in conjunction with overall dynamic performance of the vehicle.