On-chip terahertz system is a design which integrates terahertz generation device, detection device and waveguide transmission device on to the same substrate. It is utilized to measure the spectral absorption of crystal materials to achieve the function of terahertz time-domain spectroscopy (THz-TDS) system. The terahertz generation device and detection device are photoconductive antennas and the waveguide transmission device is Microstrip Line(MSL). MSL can transmit high frequency electromagnetic waves, but it also shows a higher attenuation and dispersion compared with the free-space waveguide. In order to study the influence of the structural parameters of microstrip lines on the transmission loss of terahertz wave, simulation is performed to show that the transmission loss increases with the increase of transmission length and frequency. At the same time, with the increase of the thickness of metal layer and dielectric layer, the transmission loss reduces gradually, thus proving that the reduction of transmission loss can be achieved through the rational design of microstrip line structure.