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For reducing the magnitude of stray current, the diode-grounded system is an improvement over the solidly grounded system, but the rail potential and stray current remain large. However, since the diode device of this system provides a path for stray current, the magnitude of the stray current can be easily and conveniently monitored, and positive-pole earth faults can be inspected. A novel control scheme is proposed. The output voltage of the traction substation is controlled such that it remains constant in the diode-grounded system, thus the magnitude of rail potential and stray current can be reduced. Kaohsiung MRT systems are used as an example of simulating multiple traction substations and multiple trains. The simulation results show that this novel control scheme can greatly reduce the stray current and rail potential.