This paper presents a Wireless Sensor Networks (WSNs) technique for the purpose of on-line monitoring of rolling bearing in freight train. A new technical scheme including the arrangements of sensors, the design of sensor nodes and base station, routing protocols, signal acquirement, processing and transmission is described, and an on-line monitoring system is established. Considering the approximately linear arrangements of cars and the running state of freight train, a linear topology structure of WSNs is adopted and five linear routing protocols are discussed in detail as to obtain the desired minimum energy consumption of WSNs. By analysing the simulation results, an optimal multi-hop routing protocol named sub-section routing protocol according to equal distance is adopted, in which all sensor nodes are divided into different groups according to the equal transmission distance, the optimal transmission distance and number of hops of routing protocol are also studied. We know that the communication consumes significant power in WSNs, so, in order to save the limit power supply of WSNs, the data compression and coding scheme based on lifting integer wavelet and embedded zerotree wavelet (EZW) algorithms is studied to reduce the amounts of data transmitted. The experimental results of rolling bearing have been given at last to verify the effectiveness of data compression algorithm. The on-line monitoring system of rolling bearing in freight train will be applied to actual application in the near future.