The underground transmission lines is continuously expanded in power systems. Therefore the fault of underground transmission lines are increased every year because of the complication of systems. However the studies dealing with fault location in the case of the underground transmission lines are rarely reported except for few papers using traveling wave method and calculating underground cable impedance. This paper describes the algorithm using fuzzy system and travelling wave method in the underground transmission line. Fuzzy inference is used for fault discrimination. To organize fuzzy algorithm, it is important to select target data reflecting various underground transmission line transient states. These data are made of voltage and average of RMS value on zero sequence current within one cycle after fault occurrence. Travelling wave based on wavelet transform is used for fault location. In this paper, a variety of underground transmission line transient states are simulated by EMTP/ATPDraw and Matlab. The input which is used to fault location algorithm are Detail 1(D1) coefficients of differential current. D1 coefficients are obtained by wavelet transform. As a result of applying the fuzzy inference and travelling wave based on wavelet transform, fault discrimination is correctly distinguished within 1/2 cycle after fault occurrence and fault location is comparatively correct.