A wireless realtime disc cutter wear monitoring system for composite shield machine is established, so as to control the state of disc cutter and guide the construction. The distance variation between disc cutter ring and sensor is turned into electrical signal, according to which the disc cutter wear can be calculated. The wire monitoring method and wireless monitoring method are adopted so as to transfer the monitoring data to upper computer. The main type of disc cutter failure, monitoring and estimation mechanism are analyzed; and then the installation structure and practical method of the monitoring system are emphatically discussed. The construction practice shows that the abovementioned monitoring system is feasible and can achieve good effect.