The distribution networks in China are mostly the ungrounded neutral system or the resonant grounded system. Timely selection of the fault line is of great significance to power systems after fault. This paper proposes a parameter identification method in frequency-domain to solve this problem. By using the matrix pencil method to extract frequency-points and their information in zero-sequence voltage and zero-sequence current， spectral leakage in discrete Fourier transformation is avoid. With the estimated frequency points， an equation is established in frequency-domain， which will help to calculate the capacitance value and further identify the fault line. Compared with the time-domain method， this method requires a lower sampling rate and has higher accuracy. Moreover， the frequency-band in this new method is wider than the traditional frequency-band of the first capacitive frequency band filtering method. In theory， a filtering process is not needed in this method. Verified by simulation in ATP-EMTP and data from real time digital simulator（RTDS）， the new method is quite effective in fault line selection with an ability to overcome transition resistor and is free from the impact of arc-suppression.