Recently the technology of the trenchless drilling of road construction is developing fast as a new technology. However the problem of fault diagnosis in the trenchless drilling pneumatic impact device which works under ground puzzles users frequently. Combined the traditional vibration diagnosis technology with the grey relational theory, a novel grey fault diagnosis approach is presented. With the grey relational degree used to make cluster analysis, the on-line monitoring and diagnosis is realized. The experiment results show that this method is highly reliable and the stucture is very simple.