Composite insulators have gradually become the preferred approach for electrical insulation in power systems, especially in polluted areas. Composite insulators consist of three main components: the shed, rod, and end fitting. Insulators withstand mechanical stresses via rods that are composed of glass-fiber-reinforced epoxy (GFRE). However, regardless of the high tensile strength of GFRE rods, in real-life operation, abnormal fractures have frequently been reported all over the world, which substantially increase the risk of major accidents in power systems. Fractural accidents mainly consist of brittle and decay-like fractures, which exhibit rather different morphologies at the cross sections. Brittle fracture has been effectively eliminated, while the mechanism of decay-like fracture has still not been clearly revealed. In this study, surface discharge tests were applied to investigate the discharge influence on the degradation of GFRE. The test successfully simulated the composition variation of the rods in real-life composite insulators with decay-like fractures. Moreover, it confirmed that the distinction between the characteristics of brittle fracture and decay-like fracture stems from epoxy degradation due to hydrolysis and carbonization. In addition, the respective influences of the resin type, glass fiber type, and acid liquid immersion on the degradation process were probed, and the degradation mechanism proposed in this research was verified. Based on the results, measures for preventing the development of decay-like fractures in real-life operations were determined.