The invention discloses an AGC control method based on a frequency modulation market environment. The method includes step 1 an independent control area is established, a frequency modulation servicemarket is arranged in the control area, and the power plants in the area are subjected to tendering and bidding according to the frequency modulation requirements published by the control area, the control area is used for carrying out clearing and settlement according to the bidding result of each power plant; step 2, an AGC system is used for setting the adjusting range of the bid-winning AGC unit, and generating the initial frequency modulation bandwidth of the unit for the clearing result of the frequency modulation service market; step 3, on the basis of the initial frequency modulation bandwidth of the unit, generating the dynamic frequency modulation bandwidth of the unit according to the load change condition; step 4, the AGC system calculates the area control error of the controlarea at the current moment, then combines the real-time area control error value with the area control error historical data, and performs frequency division calculation on the area control error datasequence; and step 5, a frequency modulation unit is called to adjust the area control error. The frequency modulation effect of the unit is optimized, and the economical efficiency of the frequencymodulation service is improved.