Interface defect can be commonly found between the rod and the sheath of the composite insulator. The defect will distort the electric field nearby, which have a bad effect on the electricaland mechanical properties of the insulator.In order to study the electric field distributionof insulators under different fault conditions, a 3-D model of AC 110 kV composite insulator is established using the finite element analysis software COMSOL. The influences of the interface gap filled with air or water on the internal and the axial electric field distribution of the insulator are discussed. The results show that the electric field magnitude at the air gap increases significantly compared with the normal case. The maximum value of field is correlated positively with the gap span and thickness, and negatively with the gap length. Theoretical analysis based on the air gap equivalent arc cylinder model is given, and the deficiency of the equivalent cylinder model is corrected. Water permeation reduces the air gap field magnitude, meanwhile severely distorts axial electric field of the insulator. The field magnitude goes up linearly as the sheath damps, which may lead to corona discharge, causing flashover and other accidents, when the damping reaches a certain degree.