In view of the problems of strong subjectivity, poor consistency, and heavy workload in traditional safety analysis methods, this paper proposes an analysis method of intrinsic safety of equipment system based on fault propagation. Firstly, based on the mathematical model and typical fault modes of the system, the nominal model and extended model of the equipment system are established using Simulink. Secondly, a monitoring module is constructed with Simulink to monitor the performance response of components or systems after faults, thereby automatically realizing the determination of fault influence. Then, fault combinations of each subsystem are injected to ascertain the impact of faults on adjacent subsystems, obtain the fault propagation path, and output the minimal cut set and occurrence probability of the top event of the system. Finally, an engineering example is provided by combining the lateral-directional control system of a certain type of equipment, and a comparative analysis is conducted with the classical state traversal method. The results demonstrate that the proposed method can exponentially reduce the number of fault combinations and enhance the efficiency of safety analysis while ensuring the correctness of the analysis results.