The electro-hydraulic pressure servo valve (EHPSV) plays a role in converting electrical signals into precise hydraulic pressure output to meet the specific pressure requirements of the system. The EHPSV has a fast response speed, making it suitable for precise control in fields such as aerospace, aviation, and industry that require high dynamic response. The EHPSV is also a product that integrates mechanical, electromagnetic, and hydraulic technologies, making its failure mechanisms complex and often difficult to diagnose the causes of failures. This paper established a functional performance model of an EHPSV based on AMESim. By comparing measured values with simulated values, the accuracy of the simulation model was confirmed. Using this model, the dynamic and static characteristics of the EHPSV were studied. Furthermore, by adjusting key parameters in the simulation model, a fault injection analysis of the EHPSV was conducted to determine the impact of demagnetization of magnetic steel on EHPSV performance. The results indicate that the EHPSV exhibits excellent dynamic performance, with a fast response speed and good responsiveness. As the magnetic properties decrease, the stability of the EHPSV output pressure weakens, the pressure response time increases, and continuous oscillation may even occur. This work supports more in-depth fault simulation studies for the EHPSV, enabling improvements in quality in terms of design, processes, and testing methods.