With the deep application of smart grid, the existing substation running status online monitoring system is unable to meet the intelligent substation. This paper develops a new intelligent substation on-line monitoring and fault location analysis system. Firstly, this paper analyzes the performance requirements of intelligent substation on-line monitoring and fault location analysis system. In this paper, the system structure of master station and sub-station is designed for the development of intelligent substation on-line monitoring and fault location analysis system under the background of communication network. The paper then analyzes the software structure of the master station and the sub-station. Finally, the data application of on-line monitoring and fault location analysis system is analyzed. The results of the field operation show the effectiveness of the developed system.