The invention discloses a fault detection and grounding protection system for a large-capacity pulse power device. The fault detection and grounding protection system comprises a fault detecting unit,a fault judging unit and an action unit, wherein the fault detecting unit is used for detecting a capacitor short-circuit fault and outputting a corresponding fault signal; the fault judging unit isused for performing logic judgment according to the fault signal, realizing positioning of the fault and sending out a command signal of a protection action; and the action unit implements rapid grounding protection on a non-faulty capacitor in the pulse power device according to the command signal, and limits the energy injected into the faulty capacitor. The fault detection and grounding protection system provides reliable fault detection on potential isolation and self-energy-extraction for the pulse power device by detecting a reverse current signal on the non-faulty capacitor, can automatically utilize the fault detection signal to perform energy release when a capacitor main insulation short-circuit fault occurs, so as to isolate the fault within a local range, and ensure the safetyof the pulse power device; on the other hand, the energy utilization rate of the pulse power device can be improved by eliminating a damping protection inductor.