For transmission lines with two shunt reactors， this paper presents a novel method of identifying permanent faults for single-phase auto-reclosure. After the breakers of two terminals cut off the fault phase under the single-phase fault， the fault phase currents in the two terminals are compared based on the principle of differential current protection to judge whether the fault is permanent or temporary so as to determine whether to reclose the breakers of two terminals or not. Temporary faults can be regarded as external faults while permanent faults can be regarded as internal ones. ATP simulation results show that the method presented can identify permanent faults correctly and is hardly affected by grounding resistance.