Power quality monitoring is the cornerstone for power quality analysis, diagnosis and improvement. The measurement of power quality (PQ) evolves from instantaneous metering to continuous monitoring. Furthermore, recent technologies enable us to construct more flexible, reliable, rapid and economical power quality monitoring system (PQMS). Therefore, this paper presents an improved PQMS with a new distributed monitoring structure. The proposed PQMS consists of a PQ meter, PQ analyzer and GUI. The PQ meter only collects raw data and the PQ analyzer performs power quality analysis. It has several advantages compared to conventional structures in economic efficiency, modularity, speed, etc. PQ monitoring algorithms to catch steady-state trends and to detect PQ events are also adapted to the proposed structure. Using the proposed structure and monitoring algorithm, a prototype PQMS is constructed and real-time testing is performed.