A flood of alarm messages in an unmanned digital substation could bring challenges for operators in the remote control center to perform the monitoring task efficiently， especially in situation with one or more abnormal/faulted devices. Under this background， an on-line intelligent alarm processing system is developed in this work based on architecture of the digital substation. First， real time alarms are classified according to IEC 61850 standard so as to provide synthesized and organized alarms for the alarm processing procedure in the next step. If some alarm messages about the operation/tripping of one or more protective relays/circuit breakers are issued， then the on-line intelligent alarm processing module will be activated. Two modules， i.e.“the generation of candidate hypotheses” and“the evaluation of the hypotheses”， are operated in parallel for on-line implementation of alarm processing. The developed on-line alarm processing method cannot only identify the cause of disturbance/fault， but also can identify the missing and false alarms. According to practical application requirements， an on-line intelligent alarm processing system is developed and has been applied to Xingguo digital substation， the first digital substation in Jiangxi province. Finally， an actual fault scenario is served for demonstrating the method presented as well as the software system developed.