An electrodynamic tether system (EDTS) in a near-Earth circular orbit is considered. EDTS contains conductive tether with lumped masses attached to it at the ends. Possible equilibrium positions of the stretched tether under the influence of gravity gradient, Ampere and Lorentz forces in orbital frame are investigated. It is shown that in addition to the vertical equilibrium position, the "inclined" equilibrium positions of the tensioned tether are also possible. Conditions are obtained for the EDTS parameters, under which there is only one vertical position of the tether equilibrium. On the basis of nonlinear differential equations of motion, using the Lyapunov functions method, sufficient conditions for the stability of the vertical position of the tether equi-librium are obtained. It is shown that stabilization of the tether in this position is possible in the presence of damping in the EDTS system. The results of numerical simulation are presented.