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In this paper, a power quality monitoring system based on network is developed. The system combines communica-technology and database technology, is made up of the monitor devices, monitor terminating, database and the Web server etc, using the B/S model which is a layered distributed structure. According to the power quality standards of China, the system can on-line monitor the power grid in real time. In addition, to classify the transient disturbances, this paper adopts wavelet decomposition and decision tree algorithm, which can be realized by programming in software. Through this system, users can easily view the condition of power quality. It provides true, reliable and real-time information for the governance of power quality issues.