A looped data transmission system has a pair of looped transmission lines forming two transmission systems having different transmission directions, and a plurality of stations including at least one control station connected to said transmission lines of the two transmission systems. If a fault occurs in the two transmission lines of the two transmission systems in the same section, a loopback configuration is established such that stations adjacent to the faulty section send signals from one system back to the other system. With the loopback configuration being established, the stations which have received supervisory signals sent from a loopback end station send them back to the transmission line of the other system. When one of the loopback end stations has received a supervisory signal from the direction of the faulty section, it is judged that a portion of the faulty section is recovered, and the result of the judgement is communicated to the control station.