The invention relates to an on-line monitoring method of low-frequency oscillation of a power system. In the on-line monitoring method, parallel filtration calculation is carried out at an oscillation frequency by creatively utilizing time-frequency atom compound band-pass filter function to obtain oscillation mode number, practical oscillation frequency distribution and real-time amplitude information. On the basis of the redundancy of adjacent real-time amplitude information, various oscillation mode amplitudes and decay time constants can be obtained by utilizing least square optimization estimation; based on the obtained oscillation frequency distribution, amplitude and decay time constant, a low-frequency oscillation signal model can be built, wherein only an initial phase and direct-current component amplitude of each mode are unknown; and optimization estimation is carried out on the model by utilizing a particle swarm optimization algorithm to obtain the initial phase and the direct-current component amplitude. The method has good noise robustness, can be used for accurately distinguishing compound oscillation models, is favorable for the strong non-linear mode analysis ofthe power system and is convenient for on-line monitoring and application.