Aiming at the problem that on-site detection of high-voltage cable sheath faults still relies on manual line inspection and infrared thermography, making accurate online localization difficult, an online sheath fault localization method based on a distributed parameter model and fault transient information is proposed. First, a distributed parameter model of high-voltage cables considering the sheath structure is established, and the transient voltage response functions of outer sheath faults under different grounding modes is derived. Then, by utilizing the characteristic that the instantaneous phases of the fault transient voltages on both sides of the fault point are consistent, a distance calculation equation for outer sheath fault localization is formulated. Finally, a genetic algorithm is employed to optimize and solve the distance equation to determine the fault location. Simulation results demonstrate that the proposed method can achieve online fault localization of outer sheath faults under various fault scenarios for both single-end grounding and cross-bonded grounding cable systems, and exhibits low sensitivity to fault transition resistance and fault inception angle.