In order to evaluate the effect of dissociated methanol gas on the performance of methanol engine under the equivalent ratio combustion condition, a 3D simulation model was established based on a methanol ignition engine and calibrated by the experimental data of cylinder pressure. The influences of different substitution proportions of dissociated methanol gas on the engine performance were then studied based on the calibrated model. The results show that increase of substitution ratio will increase the maximum cylinder pressure and heat release rate, advance the corresponding crank angle and combustion center, and shorten the combustion duration. The indicated power of engine decreases gradually with the increase of substitution ratio mainly due to the decline of injection fuel mass and total heat value under the condition of equivalent ratio combustion. After considering the exhaust heat recycle, increasing substitution ratio will lead to the increase of indicated thermal efficiency, which shows a trend of increase first and then decrease and reaches the peak of 41.26% when the substitution ratio is 50%.