Utility companies have benefited from the use of condition monitoring to optimize the performance of their assets and enhance power system reliability. This thesis starts with a review of different applications of condition monitoring in a distribution system, and one of the findings is that several challenges faced by condition monitoring cannot be fulfilled by passive methods or offline monitoring. It is also found that power electronics has been utilized as an effective manner to create active disturbance in a distribution system. Based on these findings, power electronics aided online monitoring methods are presented to address three challenging condition monitoring problems. Proper grounding at a substation is a necessary practice for utilities to ensure substation safety and prevent equipment damage. This thesis presents an active online method which can continuously monitor the condition of a grounding grid. The current is created by a thyristor-based signal generator and injected into the tested grounding grid. The measured touch voltage and step voltage are then evaluated to determine if hazardous spots are detected. Fault detection in a de-energized feeder is another challenge for utilities, as all conventional passive detection methods cannot function in a de-energized system. This thesis describes an active method by using a three-phase thyristor bridge to inject signals into de-energized downstream. The corresponding voltage and current are analyzed to determine if a fault still exists. A harmonic impedance based algorithm is also developed to detect a symmetrical fault, and distinguish a fault from a shunt capacitor or a stalled motor, which behaves like a fault when a voltage is applied. Neutral-to-earth voltage has become an increased concern, as it not only has impact on livestock production, but also affects public safety. An active method to monitor neutral grounding integrity is presented. A small disturbance is injected into neutral by firing thyristors, and the neutral current flow is monitored to determine the neutral condition. The method can also be used to analyze the contributions of utility and customer to neutral-to-earth voltage.