In order to narrow the searching range of power system failure and avoid fault judgement of all components successively, an identification method of fault area in power system based on colored self-modifying Petri nets is proposed. Through this method, the fault diagnosis problem is limited to one or more passive network. First, a colored self-modifying Petri nets model used to detect the fault area is built based on Petri nets. This model can interpret the power network topology change, a discrete event dynamic process, caused by the breakers trip. All components are assigned with color attributes and the weights of some directed arcs are variable in the model. Then, searching of the fault area is realized by Java in the NetBeans, the developing environment of the software. Simulation results on 8-bus testing system indicate that the proposed method can detect the fault area rapidly and accurately against single fault, multiple fault and the complex fault with malfunctions of several protections and breakers. Furthermore, this method also contributes to smooth subsequent process of power system fault diagnosis.