In this paper independent component analysis (ICA) method for amplitude and frequency estimation of distorted power system signals is proposed. In order to protect system and keep it in safe operation mode the amplitude and frequency estimation should be conducted accurately. Transient disturbances of the power system may reduce estimation performance due to the distortion strength. In this study white noise and pulse noise which are very common for power systems, are used to contaminate power system signal. Thus, the proposed method is employed to decompose noise from system signal and hence to improve the efficiency of the estimation. Computer simulations have been carried out for the performance analysis of the ICA method and the comparison of the results of the proposed method with the conventional filters are displayed by using mean square error (MSE) values.