Propulsion system modeling including propeller performance characteristics has a very important effect in the design and performance prediction of propeller-driven Unmanned Aerial Vehicles (UAVs). Motivated by modeling and simulation of small propeller-driven UAVs, the present paper focuses on the investigation of an accurate propeller-propulsion model used in these UAVs. First, propeller performance characteristics are measured in wind tunnel. Then, the engine model is identified based on experimental measurements of the engine input and output signals. The complete propeller-propulsion model, combining propeller and engine models, is then developed. Aerodynamic tests are performed at a low speed subsonic wind tunnel to measure both propeller static and dynamic characteristics. A special test rig is designed and manufactured in which the engine, propeller and all sensors are mounted. The propeller dynamic test is conducted by changing the advance ratio. This can be done by changing either throttle position or wind tunnel airspeed while keeping the other one constant. Both ways are used to collect dynamic performance data which allow covering the whole range of advance ratios until reaching the braking and windmill modes. For each advance ratio, thrust, torque and power coefficients and hence the efficiency are obtained. For the propeller static test, thrust and torque are measured in stationary air over a range of propeller rotational speeds (RPM). The relation between the coefficient of thrust, torque, power and the static efficiency were obtained at a large range of RPM. The results show good agreement with published data. Engine and its servo motor is identified using experimental data as either first or second order transfer function model. The complete propeller-propulsion model is developed, validated with a very good agreement between simulation and experimental data.