Highly accurate control of an air-fuel ratio is very important to reduce exhaust gas emissions of gaseous-fuel engines. In order to achieve this purpose, a precise engine model is required to estimate engine performance from the engine design process which is applied to the design of an engine controller. Engine dynamics are considered to develop a dynamic engine model of a gaseous-fuel engine. An effective air mass ratio is proposed to study variations of the engine dynamics according to the water vapor and the gaseous-fuel in the mixture. The dynamic engine model is validated with the LPG engine under steady and transient operating conditions. The experimental results in the LPG gaseous-fuel engine show that the estimation of the air flow and the air-fuel ratio based upon the effective air mass ratio is more accurate than that of a normal engine model.