The invention relates to a local feeder line fault isolation method and system based on permanent fault identification. The method comprises the following steps of firstly, when a distribution line suffers from a fault, each section switch on the distribution line is tripped; and then permanent fault judgment is carried out on each section switch, and if any one section switch is judged to be in anon-permanent fault, the section switch is switched on after delay, and if the section switch is judged to be in a permanent fault, the section switch is not switched on. Therefore, the method only carries out a one-time of "stripping-switching on" process, and has the advantage of being small in switching action frequency, closing of the switch on a permanent fault can be avoided, and the systemhas the advantage of being small in impact on a distribution network system. Moreover, the method does not depend on a communication system, and does not need to be matched with a main station, so that the method is simple and reliable in process. In addition, the section switches do not need to be matched stage by stage, and the recovery power supply time of the fault isolation and non-fault sections is short, so that the recovery power supply speed of the fault isolation and non-fault sections is further accelerated.