An SIRS epidemic model with nonlinear saturation incidence rate and time delay was investigated. By analyzing the corresponding characteristic equations, the local stability of disease free equilibrium and endemic equilibrium was discussed. The bifurcation property was obtained as the time delay passed through a critical value. Applying the center manifold argument and normal form theory, some local bifurcation results were obtained and the formulas for determining the bifurcation direction and stability of the bifurcated periodic solution were derived. Numerical simulations were presented to illustrate the theoretical analysis.