The invention discloses an effective grounding three-phase insulated electrical fire online prevention and control device and method. The prevention and control device of the invention includes a DSPunit, a single chip microcomputer module, a photoelectric coupler module, an alarm unit, a control output unit, an Ethernet communication unit, a reset circuit module, a residual current signal detection module, a residual current signal conditioning circuit module, a voltage signal detection module and a voltage signal conditioning circuit module. According to the prevention and control method ofthe invention, the prevention and control device is used to decompose and restore the lumped residual current of the power supply circuit of an effective grounding three-phase AC distribution systemto all the phases, extract the resistive residual current component of each phase which truly characterizes the insulation characteristic and further calculate the resistive insulation resistance of each phase to ground. Thus, the insulation performance and potential electrical fire danger of the power supply circuit of the effective grounding three-phase AC distribution system are monitored online, and grounding short circuit faults and electrical fire accidents are prevented. The method of the invention can overcome the defects of conventional methods, such as false alarm, alarm failure andincapability of online detection.