The outer sheath of cable is easily damaged by external force and environmental factors, which leads to the rapid decline of mechanical and insulation properties and even line failure. Aiming at the problems that the existing cable sheath damage is difficult to find, repair and need to be repaired by power failure, a cable insulation sheath material based on host-object inclusion supramolecular self-repair technology is designed and prepared, which can self-repair after aging damage and restore its mechanical and electrical properties. In this paper, the damage of insulating medium and its repair mechanism are explored from the molecular dynamic’s theory. The research shows that the damage of insulating medium leads to the increase of free volume and the decrease of cohesive energy between molecular chains, while the free volume decreases and the cohesive energy increases when the damage is repaired. Based on the repair mechanism of insulating medium, the host and guest molecules were grafted on the cable sheath material, and a stable self-assembly system was formed through the inclusion of host and guest molecules. The molecular dynamics simulation analysis showed that after the inclusion of host and guest, the cohesion energy increased by 23%, the solubility coefficient increased by 11%, and the free volume fraction decreased slightly, forming a stable self-assembly system, repairing the broken molecular chain and realizing the self-repair of cable sheath damage.