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This paper presents a novel time-domain fault location algorithm for parallel transmission lines using two terminal currents. Parallel transmission lines with faults can be decoupled into the common component net and differential component net. Since the differential component net is only composed of the parallel lines and its terminal voltages equal zero, the proposed algorithm is based on the fact that the difference between voltage distributions, calculated from two terminal currents, is the smallest at fault point. To be practical, unsynchronized data and the transient transferring ability of the current transformer are taken into consideration. The algorithm needs a very short data window, and any segment of current data can be used to locate faults. The proposed algorithm is verified successfully using the simulation data generated by the frequency-dependent line model of the Alternative Transients Program and the field recording data provided by traveling-wave fault locators. Locating results show the satisfactory accuracy of the algorithm for various fault types, fault distances, and fault resistances. Index Terms--Differential component net, fault location, parallel transmission lines, protective relaying, two terminal currents.