Moisture damp has been identified as one of the most harmful agents of multilayer composited insulation, which can seriously accelerate its degradation, cause unexpected failure, and even lead to catastrophic accidents. This article proposes a nonintrusive method for moisture inspection of multilayer insulation structure based on terahertz (THz) technology with a focus on the cable terminal of the electric multiple units (EMUs). First, a three-layer scattering model is established based on the actual structure of the composite cable terminal, and theoretical analysis is performed to reveal the potential application mechanism. Based on that, an artificial model of a three-layer structure is then built on which the insulation damp test is carried out. Finally, the THz spectrum and THz imaging tests are performed. Results show that the frequency-domain signal can effectively identify the moisture inside the multilayer composited insulation. The imaging results in the frequency domain of the sample can accurately determine the geometric parameters of the damp area. By further analyzing the time-domain spectroscopy, the thickness of insulation affected by moisture can be identified quantitatively. This article verifies the feasibility of THz technology in inspecting the moisture dampness of multilayer composite insulation and its potential application in the damp condition assessment of EMU cable terminals.