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The circulating current method can judge whether the multipoint earthing fault happens by monitoring the variety of metal sheath's circulating current value. This article introduce an on-line monitoring system which use the circulating current method to monitor the multipoint earthing fault of the metal sheath. In the hardware layer, we use distributed current sensors and microcontroller's acquisition units to complete the signal acquisition and signal conditioning of the circulating current value. After the distributed acquisition and conditioning, the signals, through the RS485 bus, will be sent to the Ethernet Serial Device Server network system and then connected to the console cabinet. The computer of the console cabinet could read the circulating current value on-line by the Real Com Mode of the Ethernet Serial Device Server. This distributed on-line monitoring system has a simple structure, excellent real-time performance and high reliability proved by the practical operation.