To meet the requirements of fast performance and reliability for multi-terminal modular multi-level converter based high voltage direct current (MMC-HVDC) grid protection, a fault identification scheme based on the characteristics of fault current component is proposed. First, the currents under faults inside and outside of a region are analyzed by using the propagation process of the traveling wave component of fault current, and the inside and outside faults are identified through the difference in changes in fault current. Second, the line-mode component is obtained by decoupling the bipolar line, and the polarity of the line-mode component of fault current can be taken as a direction criterion. Third, the calculated ratio between the averages of positive and negative fault currents is used to realize the fault pole selection. A simulation model of multi-terminal MMC-HVDC transmission line is established in PSCAD/EMTDC, and simulation results show that the proposed fault identification method can identify all kinds of faults quickly and accurately only by using the single-terminal fault current characteristics without the need of two-terminal communication, and it also has the capability of anti-overresistance, thereby satisfying the requirements for MMC-HVDC transmission fault protection.