An important challenge with on-line Partial Discharge (PD) measurements is separating stator-winding PD from electrical noise or disturbances. The plant noise, e.g., pulse from plant grounding network, etc., is one of the major interferences. An automatic grid-based rejection algorithm of plant noise is presented. The pulses acquired during standstill condition are all plant noise, they can be mapped into a grid space labeled by the extracted feature parameters, forming a plant noise distribution. The signal in generating condition is mixed by PD pulses and noise, all pulses are mapped into the grid space as well and a pending distribution is formed. Referring to the plant noise distribution, the plant noise can be rejected by subtraction of the noise grids from the pending distribution. The on-line PD measurement system based on the algorithm has been applied to in-service generators and achieves remarkable results.