In view of the feasibility of fiscal deficit monetization, this paper calculates the K value to measure the fiscal sustainability, which shows that China has been experiencing unsustainable fiscal situation for many years. By analyzing the possible positive and negative effects of fiscal deficit monetization, this paper makes an empirical analysis of the relationship among fiscal deficit monetization, fiscal sustainability, economic growth and inflation, it is found that unsustainable fiscal situation will push up the degree of fiscal deficit monetization. Deficit monetization promotes growth and increases inflation rate, however, the promotion and improvement effect are weakening. The monetization of fiscal deficit can improve the fiscal sustainability, especially in the stage of high growth rate and inflation rate and less deficit. Moreover, the monetization of fiscal deficit can reduce the deficit within a certain range with the increase of inflation rate, which indicates that the effective implementation of fiscal deficit is conditional. Therefore, the implementation of fiscal deficit monetization in China should maintain moderation, and give full play to the advantages of reducing fiscal risks and promoting economic growth.