This paper presents time-frequency domain reflectometry (TFDR)-fault detection method based on frequency division multiplexed (FDM) signal. The TFDR-method sends a reference signal into a cable and measures the reflected signals to detect a fault on cable. Therefore, the performance of TFDR-based detection method is determined by characteristic of the reference signal. Especially, choosing frequency band of the reference signal is main concern of TFDR-method since it suffers from trade-off relation between spatial resolution and attenuation of the reference signal. If one increases frequency band of reference signal to improve spatial resolution, the signal suffers from attenuation in cable. That is trade-off relation of signal. Thus, to optimize this trade-off issue, we propose multi-band signal based on FDM. This approach is able to synthesize two signals which have different frequency band; one is designed for the spatial resolution, and the other is used for attenuation. Hence, in TFDR-method, the proposed reference signal can solve the optimization problem and gives more accurate fault location without the distance limitation caused by attenuation and spatial resolution. Simulation results show that the proposed method localizes the accurate fault location.