There is a problem of poor real-time compensation ability of a grounding residual current of traditional full compensation arc suppression device in a distribution network. There is also a long-time resonance state after fault recovery. Thus a full compensation control method of grounding residual current based on a PWM-controllable converter is proposed. The principle of full compensation fault arc suppression is discussed in detail, and the capacitance to ground is measured by the frequency sweep method. The relationship between zero sequence voltage and residual current component is theoretically deduced, and a real-time control method of residual current full compensation is proposed. The active damping current injection method is used to detect the ground fault recovery in real time, and the calculation basis of active damping current is analyzed theoretically. Finally, a digital simulation study on the compensating effect of the fault current based on a 10 kV single-phase grounding distribution network is carried out. The results show that the grounding fault current can be compensated for quickly and effectively, and the full compensation device can quickly exit the operation after the fault recovery. This shows the correctness and feasibility of the proposed control strategy. This work is supported by the National Key Research and Development Program of China (No. 2018YFB1501300) and the Science and Technology Project of State Grid Henan Electric Power Company (No. SGHADK00PJJS2000062).