The invention discloses a method for realizing state monitoring and fault diagnosis of a water turbine based on a chaos theory, in particular, relates to a method for operating state monitoring and fault diagnosis of the water turbine, can preferably master the characteristic of instability of an internal flowing field of the water turbine, and solves the problem of difficult diagnosis of cavitation fault of a traditional water turbine. The method uses the promotion of wavelet transform for denoising pressure pulsation signals, and uses a chaos dynamics method for analyzing chaos dynamics characteristics of the water turbine in off-design operation so as to judge the caviation degree in the operation of the water turbine and to predict possible faults. The method is applied to the operation state monitoring and the fault diagnosis of the water turbine.