• DTS may be used to detect cable insulation faults. • The cable insulation fault diagnosis formula is proposed to be applied to the field detection of cable fault type and fault degree. • The simulation calculation model of temperature distribution is given. • A field model test was carried out to verify the effectiveness of optical fiber technology in the detection of cable insulation faults. To ensure the safe operation of power systems and reduce the occurrence of major accidents such as cable insulation failures and fires, research on the insulation characteristics and insulation diagnosis of XLPE cables has been a hot topic. Here, we present a new method of detecting faults in XLPE cable insulation based on optical fiber temperature sensors. First, a model of cable insulation degradation is established. Through the establishment of different degrees of insulation degradation, the temperature rise characteristics of the cable surface and the relationship between the temperature rise and the degree of insulation failure are obtained. To verify the effectiveness of the method, an insulation degradation experiment was carried out on XLPE cable based on distributed optical fiber temperature measurement technology. Based on three sets of successful experiments, we demonstrate that insulation faults can be located accurately. The temperature rise law of the cable insulation fault point was obtained, and the experimental results were consistent with simulation analysis. The proposed method feasibly and effectively identifies the type of cable insulation fault and diagnosis the fault degree based on optical fiber temperature sensing technology for XLPE cable insulation fault detection.