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This paper described the principle of transmission line fault location based on traveling waves. The principle and of correlation analysis is introduced, then the method using correlation analysis in fault location is given. Transmission line model is established with EMTP-ATP. Basing on the model, some kinds of fault are simulated. The feasibility of this algorithm is proved based on simulation results. By comparing with the classical wavelet analysis, this paper gave the advantages of this algorithm in two cases: noise influence suppression and accuracy of near distance fault location.