The internal insulation condition of capacitor voltage transformers (CVTs) is a key influence factor to its measurement performance and safe operation, but the internal insulation would be aged along with long-time operation and degraded influenced by environmental factors, once the insulation degradation grows, serious damages and even explosion may happen to CVTs, so it is necessary to monitor the internal insulation condition of CVTs, and the fault type and fault degree need to be identified. In this paper, a data-driven internal insulation condition identification method for CVTs is proposed. Both the amplitude and phase of the output voltage of CVTs are collected, then recognition models based on the combination of the output voltages and distribution topology of CVTs in substations are built, a possibilistic fuzzy clustering method is used to monitor the internal insulation condition of CVTs, different type and different degree of insulation faults could be identified effectively. Finally, the proposed method is verified by several cases, not only the preset typical faults in the method can be identified effectively, but also the faults beyond the preset faults could be diagnosed.