Driveline torsional vibration is always a hot and difficult issue in the field of automotive noise, vibration and harshness (NVH). Dynamometer test is implemented in a semi-anechoic chamber to investigate an interior NVH issue of mid-size multi-purpose vehicles (MPV) with a 3-cylinder engine. The source identification method of interior NVH is established through a transfer path analysis of the driveline. Then, a six-degree-of-freedom lumped parameter model is set up to predict torsional vibration and simulated in Matlab, which is also used to analyze the key impact factors of torsional vibration. Simulation results show that the engine torque, engine speed, moment of inertia and torsional stiffness of the driveline system significantly influence the torsional vibration. Finally, the advanced development strategy of driveline NVH is proposed to improve interior NVH performance.