The invention provides a method for positioning earth faults of a parallel loop of an IT (Isolation-Terre) power system. N cables of the same specifications are arranged between power transmission bus bars between the power transmission part and power receiving part of the IT power system in parallel; a direct current signal source is arranged and neutral points of a distribution transformer of the IT power system are injected through a current-limiting reactive resistance L, and a loop breaker QF is arranged at the head end of each parallel cable; load switches K and Hall current mutual inductors CT are arranged at the tail ends of the cables; the direct current signal source DC is used for supplying a fault loop power supply and the current-limiting reactive resistance L is used for protecting the direct current signal source; each loop breaker QF and each load switch K are used for switching each cable; each Hall current mutual inductor CT is used for detecting whether a fault current flows through each cable; and the switching of a direct current injection source, the opening/closing of the loop breakers QF, and the detection of the Hall current mutual inductors can be intensively controlled on an upper computer through a field bus structure.