This paper presents a fault location algorithm based on the adaptively estimated value of the local sequence source impedance for faults on a parallel transmission line. This algorithm uses only the local voltage and current signals of a faulted circuit. The remote current signals and the zero-sequence current of the healthy adjacent circuit are calculated by using the current distribution factors together with the local terminal currents of the faulted circuit. The current distribution factors consist of local equivalent source impedance and the others such as fault distance, line impedance and remote equivalent source impedance. It means that the values of the current distribution factors can change according to the operation condition of a power system. Consequently, the accuracy of the fault location algorithm is affected by the two values of equivalent source impedances, one is local source impedance and the other is remote source impedance. Nevertheless, only the local equivalent impedance can be estimated in this paper. A series of test results using EMTP simulation data show the effectiveness of the proposed algorithm. The proposed algorithm is valid for a double-circuit transmission line system where the equivalent source impedance changes continuously.