A laboratory-based sensor network testbed for Smart Grid was developed at the Smart Grid and High Power System Laboratory of The University of Hong Kong. The setup is featured by a scaled transmission-line model, visualization of sensor measurement, optical communication network, and integration with global positioning system (GPS). The transmission-line model consists of a power cable and towers in which various types of sensors including magnetic sensors, infrared sensors, strain gauges, and accelerometers are installed to monitor the condition of the transmission line and the transmission towers. Magnetic sensors and infrared sensor are employed as advanced sensors which can provide more accurate and comprehensive information of the transmission line. The sensor data is transferred to the computer for analysis and visualization. Graphical user interface (GUI) was designed in LabVIEW to integrate the data acquisition and display of measurement results including cable position, inclination and vibration of the tower, frequency and waveform of the cable current. The host computer also forms an IP network with five remote computers, via optical fiber and optical interface card, for testing various communication protocols. The topology and connectivity of the network is graphically displayed. The sensor network is integrated with GPS and can perform synchronized measurement with the GPS timing. This sensor network testbed provides a platform for the implementation testing, experimentation, and feasibility evaluation of new sensor applications under test in Smart Grid.