There is a problem in that the non-fault phase bridge arm of traditional three-phase direct-hanging flexible arc suppression device bears the line voltage. Thus a fault phase bridge arm transfer grounding arc suppression method is proposed. This method controls the fault phase bridge arm transfer grounding through the switch. The bus voltage is shared by the fault phase bridge arm and the non-fault phase bridge arm, and the three-phase bridge arm outputs the current to achieve arc suppression. The cascaded H-bridge DC-link needs an independent power supply, so a distributed voltage balance commutation modulation method is proposed. The modulation method selectively changes the H-bridge output state according to the influence of H-bridge output state and current direction on the charge and discharge of the DC-link capacitor, and then realizes the stability of DC-link voltage. The arc suppression device using this modulation method does not need to be equipped with an independent power supply on the DC side, and can maintain H-bridge DC-link voltage stability during the arc suppression process. Finally, the proposed method is verified by Matlab/Simulink simulation software, and the results prove the effectiveness of the proposed method.