The shortcomings of current fault location algorithms for distribution network are analyzed; network relationship matrix and modified matrix algorithm for fault location are proposed combined with the structure characteristics of distribution network. Comparing to the matrix algorithm and its improved algorithm which are proposed before, this algorithm has the feature of simple principle, less computation without complex computing, good real-time performance. It can be applied to both simple distribution network with single power source and complex distribution network with multiple power sources, not only the single point fault but also the multiple point faults can be located quickly and accurately. Even the signals which FTU on pillars send to master station distort, fault point still can be located quickly and accurately, it has very good fault tolerance. Analyses and simulations demonstrate the feasibility and accuracy of the modified matrix algorithm.