The paper presents a fault-location method which is insensitive to current-transformer saturation. The method requires less than one cycle of recorded fault data, which do not need filtering. A parameter estimation technique is applied where the linear part of the reference model response is described by instantaneous symmetrical components and the nonlinear part, caused by transformer saturation, described by phase variables. The parameters identified by the estimator are fault distance, fault resistance and saturation parameters. Accuracy is demonstrated by digital simulation studies.