A method for locating faults in three-terminal and multi-terminal power lines, applicable in electric power systems for overhead and underground cable transmission and distribution lines. The inventive method is characterized in that it measures current for fault and pre-fault conditions and in one terminal station of the system line phase voltage for fault and pre-fault conditions is measured, a hypothetical fault location is assumed, the distances to the hypothetical fault locations are calculated and fault resistance is calculated, the actual fault point is selected by first comparing the numerical values concerning the distances to the hypothetical fault locations and rejecting those results whose numerical values are negative or bigger than one in relative units, and then by analysing the values of the calculated fault resistances for the fault locations and rejecting those results of the calculations for which the value of fault resistance is negative, and if there is still more than one calculation result remains not rejected then performing selection of the valid result by analysing the values of the calculated respective equivalent source impedances.