According to the network structure of IEEE1588 switch operation, a kind of fault analysis method of isolated by level is provided to resolve and prevent the potential risks of IEEE1588 switch operated under special network environment. Via a specific fault case of IEEE1588 switch application in smart substation somewhere, rebuilding and analyzing the fault phenomenon off line, the fault reason is concluded and amendment advices are recommended. This fault case analysis indicates that we can locate and analyze fault rapidly via the method of isolated by level, after rebuilding the fault phenomenon, we can analyze the fault reason effectively and then get the corresponding solution.