To ensure the safely and reliably operation of capacitive equipments, an on-line monitoring system for capacitive equipment insulation in intelligent substation was developed. The insulation situation was estimated accurately through designing the software and hardware based on the IEC61850 protocol, using IRIG-B code synchronous clock to achieve long-distance synchronous sampling, using intelligent electronic device（IED） to achieve seamless connection of data between devices, and using fault diagnosis algorithm to achieve data analysis. Running results show that the system not only can accurately monitor the running state information of capacitive equipments, such as leakage current, dielectric loss, equivalent capacitance and so on, but also can transmit data to the on-line monitoring data center through the IEC61850 protocol.