An on-line monitoring system for partial discharge from high voltage transformer is presented with structure of hardware and principle of software discussed and a new effective method combining DFT with DWT is proposed to get rid of both sinusoidal continuous noise and other external discharges. An on-line monitoring system for partial discharge from high voltage transformer is presented with structure of hardware and principle of software discussed and a new effective method combining DFT with DWT is proposed to get rid of both sinusoidal continuous noise and other external discharges.