This paper presents an image reconstruction method to monitor the temperature distribution of electric generator stators. The main objective is to identify insulation failures that may arise as hotspots in the structure. The method is based on temperature readings of fiber optic distributed sensors (DTS) and a sparse reconstruction algorithm. Thermal images of the structure are formed by appropriately combining atoms of a dictionary of hotspots, which was constructed by finite element simulation with a multi-physical model. Due to difficulties for reproducing insulation faults in real stator structure, experimental tests were performed using a prototype similar to the real structure. The results demonstrate the ability of the proposed method to reconstruct images of hotspots with dimensions down to 15 cm, representing a resolution gain of up to six times when compared to the DTS spatial resolution. In addition, satisfactory results were also obtained to detect hotspots with only 5 cm. The application of the proposed algorithm for thermal imaging of generator stators can contribute to the identification of insulation faults in early stages, thereby avoiding catastrophic damage to the structure.