Dry-type air-core reactor has frequent faults due to insulation aging in long-term operation, among which the inter-turn short circuit fault rate is the highest. Firstly, the equivalent circuit model of reactor inter-turn short-circuit fault is established, and the characteristics of reactor power angle change caused by inter-turn short-circuit fault are analyzed. Based on this, an on-line monitoring technology of dry air-core reactor inter-turn short-circuit based on impedance micro-incremental identification is proposed. The power factor angle of the reactor is obtained by impedance micro-incremental analysis. The test results show that the proposed technology can effectively monitor the short circuit fault of the reactor with less turn-to-turn insulation.