The invention discloses an insulator with lightning arrester and fault indicator and comprises an insulator and a fault indicator. The insulator includes an upper armour clamp, an insulator body and a lower armour clamp. The insulator body is of a cylindrical shape. The upper armour clamp and the lower armour clamp are inserted into the upper opening and the lower opening of the insulator body respectively. The inner part of the insulator body is provided with an epoxy cylinder. The epoxy cylinder is provided with a non-linear current limiting element. The end face of the lower armour clamp is provided with one connection shaft. The connection shaft is sleeved by a fault indicator. According to the insulator with lightning arrester and fault indicator of the invention, when over-voltage occurs due to thunder attack, the gaps among the copper sheets inside the insulator become communicated instantly, and the over-voltage is guided to the ground through the non-linear current limiting element, so as to prevent the burning down of conductive wires by the arc creation of over-voltage. Therefore, the occurrence of large area power outage and secondary accidents can also be avoided and the safe operation of an electric power system can be ensured. At the same time, the fault indicator is capable of accurately telling where the fault exists so that fast work can be done to eliminate the fault and that the power outage lasts a much shorter time.