For the voltage quality optimization under normal power operation, aiming at short-circuit fault in power system, a topology of dynamic voltage restorer with current limiting function (DVR-FCL) is proposed. A parameter design of DVR-FCL based on the objective function of current limiting impedance and the adjustment of DC voltage is introduced. The design methods of the DC link voltage, the output filter, series transformer capacity, the leakage reactance, the series converter and the DC link capacitor are analyzed in detail. The operations of DVR-FCL to voltage sag and short-circuit fault are respectively verified by PSCAD/EMTDC. Simulation results show that the proposed topology and parameters design methods are correct and reasonable, and can effectively realize the double functions of voltage quality improvement and fault current limiting. Thus, it can ensure the security and stability of power system.