For the difficult problem of hot spot temperature on-line monitoring in prefabricated substation, this paper proposes an application of optical fiber sensing scheme, which fiber optic temperature sensors are installed in transformer. The effect of transformer load on the life loss of transformers is also evaluated in this paper. The data of rated load test and the overload test of transformer are indicated that the optical fiber on-line monitoring system can accurately and real-time capture the hot spot temperature of the transformer, and gives the reasonable suggestion of the load condition.