It is extremely important to research traction power supply system (TPSS) protection technology in order to ensure the safe operation of urban rail transit. A TPSS includes rails, return cables, rail potential limiting devices, one-way conducting devices, drainage cabinets, ballast beds, and tunnel structural reinforcements. In urban rail transit, on the basis of the dynamic characteristics of the TPSS, a fault location algorithm based on particle swarm optimization algorithm (PSOA) is developed. An evaluation of multi-point monitoring data is proposed based on fuzzy processing of the average value of polarization potential forward deviation and multi-attribute decision-making. Monitoring points and standard comparison threshold values are determined by the distribution law of stray currents. In conjunction with the actual project, the model is trained using field measured data. Based on the results, TPSSOA is able to achieve optimal discharge current control, reduce network losses and improve power quality. Moreover, the reconstruction results demonstrate the high usability of the proposed method, which will provide guidance to design the TPSS in the future.