Abstract: The reliance of electrical equipment depends to a great extent on its insulation. This study has proposed a remote on-line system to monitor the insulation of capacitive equipment. The system adopts an adaptive algorithm based on multiple sampling and a clustering algorithm based on weighted average grey relational analysis is applied to solve the value of dielectric loss (tanδ) which is the primary parameter in assessing insulation. The system involves a three-layer distributed architecture with two working modes of active query and interruption woken up. DSP is used as the data collection controller on the bottom layer; Zigbee and GPRS ensures communication within the system. The upper monitoring center is capable of data monitoring, analyzing, diagnosing and report generating. The test results show that the system has high accuracy and satisfying synchronization.