The operation safety and condition monitoring of hydraulic equipment is an important content in production because of its unique characteristics, hydraulic system is widely used in various fields. It is difficult to locate the fault source because all the components of the hydraulic system work in the closed oil circuit. In order to solve this problem, this essay puts forward a kind of fusion of Internet of things technology dynamic fault diagnosis method of the GRNN model ,which is based on intelligent control of the Internet of things and using of wireless sensor network technology in distributed hydraulic equipment of each parameter in realtime measurement and control, remote data sharing, the acquisition of fault signal input GRNN model fault observer, detection threshold, through experimental simulation accurate diagnosis of system failure.In response to this problem, a fault diagnosis method of the dynamic GRNN model incorporating the Internet of Things technology is proposed. Based on the intelligent control of the Internet of Things, the wireless sensor network technology is used to measure and control the data parameters of the distributed hydraulic equipment in real time and remotely. This method inputs the collected fault signal into the GRNN model fault observer, calculates the detection threshold, and accurately diagnoses the system fault through experimental simulation. The experiment showsthat this method can be effectively applied in the hydraulic system of process production to ensure the normal operation of the system, reduce the failure rate of equipment, and improve the production efficiency.