Measurement errors of a capacitive voltage transformer (CVT) are relevant to its equivalent parameters for which its capacitive divider contributes the most. In daily operation, dielectric aging, moisture, dielectric breakdown, etc., it will exert mixing effects on a capacitive divider’s insulation characteristics, leading to fluctuation in equivalent parameters which result in the measurement error. This paper proposes an equivalent circuit model to represent a CVT which incorporates insulation characteristics of a capacitive divider. After software simulation and laboratory experiments, the relationship between measurement errors and insulation parameters is obtained. It indicates that variation of insulation parameters in a CVT will cause a reasonable measurement error. From field tests and calculation, equivalent capacitance mainly affects magnitude error, while dielectric loss mainly affects phase error. As capacitance changes 0.2%, magnitude error can reach −0.2%. As dielectric loss factor changes 0.2%, phase error can reach 5′. An increase of equivalent capacitance and dielectric loss factor in the high-voltage capacitor will cause a positive real power measurement error. An increase of equivalent capacitance and dielectric loss factor in the low-voltage capacitor will cause a negative real power measurement error.