The available allocation methods of dynamic Var compensation almost take the ensuring static voltage stability as the objective， while fast responsibility makes dynamic Var compensation suitable for maintain transient voltage stability. In this paper， the mechanism of transient voltage collapse and improving transient voltage stability by dynamic Var compensation are analyzed. It is concluded that the critical fault clearing time can be used as an index to evaluate the transient voltage stability， and the allocation of dynamic Var compensation could extend the critical fault clearing time. According to these conclusions， a method for optimal allocation of dynamic Var compensation based on critical fault clearing time is proposed. By comparing the changes of critical clearing time of all critical contingencies before and after dynamic Var compensation placed， an index is drawn to be a criterion of optimal allocation of dynamic Var compensation， and the optimal allocation scheme is obtained. The method is validated through simulations on IEEE 39-bus power system.