To cope with the problems and challenges brought up by undeveloped structural monitoring information, large amount of alarm messages and insufficient intelligence on fault diagnosis capability in the “large operation” mode of State Grid, this paper researches intelligent alarm for equipment monitoring, proposes a distributed solution involving alarm processing at both substation and control center, in which functions like redundancy check for alarm information, key alarm extraction as well as fast and reliable alarm transmission are realized by adding data preprocessing module in substation side, and knowledge-based hierarchical fault diagnosis is achieved by integrating, analyzing and extracting abundant alarm information in control center, thus to accurately capture equipment fault or abnormity from rapidly updated real-time monitoring information and alarm messages.