This paper introduces a dynamic reduction strategy that preserves the original interarea modes of oscillation and produces a physical model of the power system. Although the proposed method is designed to be applicable to any multiarea system, a real system of considerable size is used in this paper as a practical example. The strategy is applied to an academic version of the Central American interconnected power system, consisting of 130 machines and six control areas. The result is a more computationally manageable model where all generators are actually present in the real system, allowing a model that is familiar to its users, and can be implemented in a format suitable to any commercial power system analysis software.