In order to solve the problems existing in grounded fault line selection using the traditional method of the electrical characteristics, a new grounded fault line selection method for compensation grid based on small-world weighted topology model is proposed. Firstly, the small-world model of high-voltage simulation network built in lab is established and the characteristic parameters under different grounded fault on the same line are calculated out. Obviously the characteristic parameters can distinguish out the different grounded fault. Then the small-world weighted topology models under the same grounded fault on the different line are created. According to lines’ length, the weighted value formula of lines is proposed and weighted average distances under the same grounded fault on the different lines are calculated out. Lastly, the simulation test is done and the results show that if the longer line is grounded, its small-world model’s weighted average distance is shorter. Therefore the weighted average distance can be acted as criterion of grounded fault line selection. And the results also show that compared to the metal grounded fault, the high-resistance grounded fault has shorter weighted average distance, which explains that the depth of the fault propagation decreases due to increasing impedance of the zero-sequence circuit.