Current differential protection（DP） based on Kirchhoffs current law is widely used as a main protection for various power system devices. Due to influence of load current， fault component based current DP has distinct advantages on removing load current influence and enhancing ability to endure transient resistance. The amplitude and phase characteristics of two-terminal fault currents are analyzed and the principle of phase correlation current DP based on fault component is proposed. The differential principle among proposed protection， conventional percentage DP and product-restraint DP is compared. Analysis results show the proposed principle is able to guarantee reliability of external fault and sensitivity of internal fault as well. And influence of current transformer saturation on DP is also analyzed. Finally， theoretical analysis and simulation tests demonstrate that the principle proposed has good operation performance.