A novel method for power transmission line monitoring and fault diagnosis is proposed based on nonlinear frequency response analysis. The power line carrier signal has been used for online monitoring of power transmission line. As the nonlinear frequency response function describes the system inherent characterization, different frequency response patterns corresponding to different operation states of transmission line can be established. Based on the analysis of transmission line characteristics of fault modes, various fault features can be extracted, thereby achieve online monitoring and fault diagnosis on transmission line. Simulation experiments show the effectiveness of the proposed method.