Abstract: In view of problems that monitoring variable is single and real-time status of insulation of mine-used dry-type transformer cannot be reflected existed in traditional monitoring method of mine-used dry-type transformer because it uses thermocouple to detect internal temperature of dry-type transformer, the paper proposed a design scheme of system of on-line monitoring, fault diagnosis and prewarning for insulation of mine-used dry-type transformer. It introduced general structure of the system and fault diagnosis method, and built a fault type library of turn-to-turn insulation of dry-type transformer. Field test result shows that the system runs stably and can realize functions of remote and real-time monitoring, fault diagnosis and prewarning for mine-used dry-type transformer.