This paper introduces the application of time synchronization schemes in digital substation and compares the technical characteristics of them. Aim to meet high-accuracy synchronization requirement of new digital substation, a time synchronization system based on IEEE 1588 which can support sub-microsecond level of accuracy is put forward. The theory of IEEE 1588 is expatiated at the same time. According to IEEE 1588, this paper expounds three application schemes on time synchronization network in substation, and analyzes the limits of IEEE 1588 applied to time synchronization between substations. Lastly, an optimal configuration synchronization network is proposed, on the basis of integrating the GPS and IEEE 1588 technology.