This study aims to establish the multi-body dynamic model for a two-stage gear reducer with sliding bearings in purpose to simulate the vibration characteristics of the gear-shaft-bearing system which is supported by the oil dynamic pressure. The theoretical calculation and practical experiments are also practiced to validate the reliability and accuracy of established model. Further, a set of bearing clearance values is suggested by using Taguchi's method to reduce the rotation speed fluctuation of the gear reducer as well as the vibration and noise.