The use of partial discharge (PD) online monitoring as an indicator of hydro-generator stator insulation condition, is well known. In this paper, a set of partial discharge online monitoring system for hydrogenerator (HPDMS) with the characteristics of high reliability is developed , and the de-noise method of the system is introduced, In succession, the influence of PD sensors installation on hydro-generator's single phase grounding fault is investigated. The system has successfully checked out a stator insulation failure, the partial discharge trends when the stator winding is in failure are shown and the reason of the failure is explained, the actual failure of the stator winding is consistent with the analysis result, which greatly increases the credibility of the PD online monitoring technology.