Highly accurate time synchronization plays a crucial role to guarantee the normal operation of protective relay in smart substation. The application of transparent clock in IEEE 1588 v2 may further enhance the precision of time synchronization system in smart substation. The basic principle of transparent clock based on IEEE 1588 v2 is analyzed. Peer-to-peer（P2P） transparent clock and end-to-end（E2E） transparent clock are compared and tested in three aspects of master clock load， adaptive response to network topology changing and time synchronization precision. The test result shows that both transparent clocks can meet the precision requirement of time synchronization in smart substation. In conclusion， P2P transparent clock is recommended in smart substation since its overall performance is better than that of E2E transparent clock.