Existing parameter optimization methods for a synchronous condenser (SC) to promote its dynamic reactive power characteristics often focus on electromagnetic parameter optimization. This brings high technical requirements and significant cost pressure to manufacturing enterprises. Thus a joint parameter optimization method for the SC excitation system and step-up transformer considering the stability boundary of the power system is proposed, and its substitutability of optimizing electromagnetic parameters is analyzed. First, the reactive power frequency domain characteristics of the SCs are derived based on the Park model. By comparing it with that of the 6th-order practical model, it is found that the Park model can enhance the accuracy of analysis of SC dynamic reactive power characteristics. Then the stability boundary of the SC grid-connected system is analyzed, based on which the parameter optimization range is determined. The frequency domain sensitivity method is applied to determine the key parameters, and the artificial fish swarm algorithm is employed for parameter optimization. Finally, simulation results demonstrate that the joint optimization of SC’s excitation and step-up transformer parameters can achieve a similar dynamic reactive power performance of the SC by only optimizing the electromagnetic parameters. This validates the substitutability of electromagnetic parameter optimization, thereby reducing the manufacturing cost of the SCs, and enhancing its scope for application.