Defective insulators seriously threaten the safe operation of transmission lines. This paper proposes an insulator defect detection method based on an improved YOLOv4 algorithm. An insulator image sample set was established according to the aerial images from the power grid and the public dataset on the Internet, combining with the image augmentation method based on GraphCut. The insulator images were preprocessed by Laplace sharpening method. To solve the problems of too many parameters and low detection speed of the YOLOv4 object detection model, the MobileNet lightweight convolutional neural network was used to improve YOLOv4 model structure. Combining with the transfer learning method, the insulator image samples were used to train, verify, and test the improved YOLOV4 model. The detection results of transmission line insulator and defect images show that the detection accuracy and speed of the proposed model can reach 93.81% and 53 frames per second (FPS), respectively, and the detection accuracy can be further improved to 97.26% after image preprocessing. The overall performance of the proposed lightweight YOLOv4 model is better than traditional object detection algorithms. This study provides a reference for intelligent inspection and defect detection of suspension insulators on transmission lines.