Intelligent substation is the core part of smart grid, and the operating condition of its secondary equipment concerns the security and the stability of the power system. For the features of intricate failure reasons and incomplete operating status information of intelligent substation secondary equipment, we established a hierarchical model and an index system to assess its operating condition. Grey clustering algorithm was introduced to classify the conditions and the whitening weight function of grey was established first, and then the analytic hierarchy process was used to calculate the weight of status indicators. Finally, the analytic hierarchy process and grey clustering algorithm was combined to qualitatively and quantitatively assess the operating condition. Practical case study verifies the effectiveness and feasibility of this method and it provides a theoretical basis for the secondary-equipment-condition-based maintenance work.