In the distribution network system with its neutral point grounding via arc suppression coil, when single-phase grounding fault occurred near zero-crossing point of the phase voltage, the inaccuracy of the line selection always existed in existing methods. According to the characteristics that transient current was different between the fault feeder and other faultless feeders, wavelet transformation was performed on data of the transient current within a power frequency cycle after the fault occurred. Based on different fault angles, wavelet energy in corresponding frequency band was chosen to compare. The result was that wavelet energy in fault feeder was the largest of all, and it was larger than sum of those in other faultless feeders, when the bus broke down, the disparity between each wavelet energy was not significant. Fault line could be selected out by the criterion above. The results of MATLAB/simulink simulation experiment indicated that this method had anti-interference capacity and was feasible.