Dynamic short-circuit current computing method（DSCCCM） is obtained based on transient simulation. The advantages of DSCCCM are pointed out by comparing the difference on grid model processing between static impedance equivalent method and DSCCCM. The on-line verification system of relay protection settings is built based on the design of DSCCCM. The true current operation state of the power grid is gained from energy management system. The short-circuit currents throughout the system are automatically calculated with the transient simulation calculation of different fault situations， achieving on-line relay setting real-time verification calculation. By comparing with the current relay settings， the security risks are pre-warned. The implementation plan and specific functions of on-line verification system of relay settings are elaborated. The application of the proposed system in North China Power Grid is introduced.