To assess the cable insulation condition, a measurement system is presented to acquire the data of the impulse voltage and surge current based on LabVIEW, and a method of active power loss is proposed for the evaluation of insulation condition of the cable. A low damping resistance-capacitance series voltage divider based on two-stage division is designed as the voltage sensor, and a hollow Rogowski coil is designed as the current sensor. The DS6104 oscilloscope is designed as a data acquisition device, and the LabVIEW software platform is used to control the oscilloscope and acquire and store data. The measurement system can automatically and synchronously acquire and store the data of the impulse voltage and surge current without oscillation and distortion. The data of impulse voltage and surge current is measured, and numerical integration is calculated to obtain active power loss of the water tree aging cable. The active power loss and the dielectric loss are consistent for the same cables sample. It indicates that the active power loss can assess the cable insulation condition.