The combination of LabVIEW and Matlab software was used to design the hydraulic system fault signal analysis system. From data acquisition, preprocessing to through the time and frequency domain signal processing method: time domain analysis, correlation analysis, spectrum analysis, cepstrum analysis etc.; time and frequency combined signal processing method: short time Fourier Transformation (STFT), wavelet decomposition (WT), EMD, EEMD, the hydraulic system normal, impact, and cavitation and blocking signals of different types were researched and analyzed offline. The computation result shows that the system can extract signal fault feature, so that quickly and accurately identify and determine fault.