A mixed method of model reduction for linear multivariable systems is proposed. The least common denominator of the elements in the reduced transfer matrix model is constructed by preserving the dynamic modes with dominant energy contributions, and the parameters of the numerators are found using the continued-fraction method. In addition, a reduced model with state-space form, having the same order as those of the reduced transfer matrix, is also found. The reduced model is always stable if the original system is stable. Moreover, the reduced model gives rather good approximations in both the transient and steady-slate responses of the original system.