Prony and Hilbert-Huang Transform (HHT) are two signal processing techniques utilized for on-line low-frequency oscillation detection. Prony algorithm is appropriate for processing stationary signals without noise. HHT algorithm has the ability of filtering high-frequency noise and processing non-stationary signals. The performance of Prony and HHT algorithms is compared from following aspects: accuracy, stability, completeness and speediness. Prony algorithm which includes the pre-filtering can meet the requirements of low-frequency oscillation monitoring, while HHT can be used for identification of disturbance source. The applicability of the two algorithms is validated with real power system data.