Neutral non‐effectively grounded mode is widely used in medium‐voltage distribution networks in China. When a single‐phase grounding fault occurs in distribution networks, abundant transient signals will be generated. Here, a fault location method based on improved Hausdorff distance is proposed with transient zero‐sequence current and transient zero‐sequence voltage of bus. First, according to the impedance characteristic analysis of the zero‐sequence network, the selected frequency band (SFB) is determined, and the transient signals in the SFB are extracted by the digital filter. Second, the projection components of transient zero‐sequence currents at each monitoring point of faulty feeder are obtained by the principle of orthogonalization. Finally, the projection component values of each section are calculated by the improved Hausdorff distance, and the maximum value is selected. If the maximum value is much larger than the sum of the values of other sections excluding the maximum value, the section where the maximum value is located is judged as a faulty section, otherwise, the downstream section of the last monitoring point is determined as the faulty section. Matlab/Simulink simulation shows that the proposed method can locate accurately under different fault conditions.