From the physical characteristics of the partial discharge, this paper analyzed the UHF signal’s characteristic parameters for the partial discharge of the power transmission equipment, used synthetically the detecting technology which combines the ultra high frequency (UHF) and the acoustic emission (AE), and established the online monitoring system for the partial discharge of the power equipment. On the premise ensuring the integrity of the partial discharge signal, the acquisition, amplification, analysis and storage of the partial discharge signal are implemented. The case-based reasoning technology determines the fault type and fault degree of the partial discharge to make the accurate judgment for the operational state of the equipment and improve the intelligence level and the operational reliability for the state diagnosis of the power equipment. The structural optimization design of the power transformer makes the no-load loss down by 50%, and the load loss down by 15%. That improves greatly the mechanical and electrical properties of the transformer.