Insulator is a tiny part in electrical equipment, but whether its working condition is safe or not plays a vital role in the safe operation of the entire power system. In this paper, digital image processing technology based on MATLAB is applied, the obtained image of the insulator is processed through filtering, gray-scale processing and binarization processing. The parameters such as insulator's bottom circle area and edge width are extracted, and compared with the calibration parameters to determine the size of insulators. The method to getting more precise characteristic values of insulators is described in this paper. It provides the evidence of judging the working state by comparing with the calibration value to capture measurements of insulators. The digital image processing technology based on MATLAB can effectively monitor the working status, high efficiency and accuracy of the insulator.