Lightning is one of critical concerns in the operation of electric power transmission and distribution systems. It is well known that the lightning strikes may cause the power system outage and even pose hazards to utility personnel. Hence, in this paper an ATP-EMTP (Alternative Transient Program-Electromagnetic Transient Program) model for evaluation of lighting strike on a 161 kV transmission line is developed. In the study, lightning arresters are installed at different equipment terminals to analyze the effect of lightning current on each terminal equipment and the suppression status of inrush current. Beside, according to the actual data of the system operation, the current installation location of the arrester is analyzed and compared with the simulation results to determine whether the arrester is a repetitive investment and the maximum efficiency installation point. Different test cases have been carried out for the study considered. The simulation results show that: (1) the lightning strikes may cause the switchgear to withstand abnormal overcurrent and be damaged. It is necessary to install arresters at the downstream end of the transmission line in the substation. (2) Installation of a series reactor can significantly suppress the lightning surge. (3) Within the substation overhead line and underground cable mixed system, installing underground lightning arrester on both ends can effectively reduce the lightning surge voltage. (4) Consider the protection of cables and transformers, the best place of lightning arrester installation should be near the transformer.