The present invention provides a power transmission and transformation equipment on-line monitoring signal processing method and device, wherein the method comprises the steps of obtaining a to-be-processed signal to carry out the wavelet decomposition to thereby obtain a low frequency wavelet coefficient and a high frequency wavelet coefficient; detecting whether the high frequency wavelet coefficient satisfies the normal distribution, if yes, carrying out the threshold value processing on the high frequency wavelet coefficient to obtain the processed high frequency wavelet coefficient, and continuously carrying out the wavelet decomposition on the low frequency wavelet coefficient until the high frequency wavelet coefficient after the wavelet decomposition does not satisfy the normal distribution; determining the wavelet decomposition times k, and carrying out the wavelet reconstruction according to the low frequency wavelet coefficient obtained after the (k-1)-th wavelet decomposition and all the processed high frequency wavelet coefficients obtained after the first to (k-1)-th wavelet decomposition to obtain the reconstructed processing information. According to the present invention, the noise in the to-be-processed signal and a test error are filtered, an effective signal in the to-be-processed information is retained as much as possible, the obtained reconstructed signal can be used for the normal analysis of a device directly, and the power transmission and transformation equipment on-line monitoring signal processing method and device has the important engineering practical significance.