This study describes the merits of PWM control of hydraulic system using high speed on-off valves. Generally, Electro-hydraulic valves can be classified into two classification: valves which are controlled by analog signal and which are controlled by digital. The former includes hydraulic servo valves and proportional valves which require A/D converters as interface to digital computer and too costly and sensitive to oil contamination because of complexity in structures. The latter includes high speed on-off valves which do not require A/D converters because they are normally operated in a pulse width modulation(PWM) method, and are low in price and robust to oil contamination because of their simple structures. The objectives of this study is to analyze the limit cycle which regularly appear in the position control system using 2/2way high speed on-off valves and to give a criterion for the stability of this system. The nonlinear characteristics of PWM and cylinder friction of this system are described by harmonic linearization and the effects of parameter variations to the system stability are simulated.