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In the traditional transformer fault monitoring system, the LPU (Local Process Unit) usually sends the data to the MMC (Main Monitoring Computer), which completes the complicated fault diagnosis and is the process center. In this paper, a novel transformer monitoring system is presented. The LPUs, the embedded systems, are designed to possess of the approximately functions to MMC such as monitoring, diagnosing and alarm. The TCP/IP and the Pub/Sub (Publish/Subscribe) technology are used to realize the design of LPU. The TCP/IP protocol and the network chip make the LPU with high transmission speed. The complicated diagnosis task is dealt with by a computer with strong data treatment capacity. The LPU and MMC can subscribe some fault diagnosis subjects.