To address the challenges of DC-side fault identification in flexible DC distribution networks and the weak anti-interference capability of conventional protection criteria, a fault protection method based on an improved fractional wavelet transform (FRWT) is proposed. First, the transient voltage signals of DC lines are extracted using the FRWT, and the adaptive energy threshold of detail coefficients is adopted as the protection start-up criterion. Then, considering the differences in transient voltages across the current-limiting reactors at both sides of the DC line under different faults, a protection criterion based on dispersion entropy is proposed to identify the fault location. Finally, exploiting the differences in detail-coefficient energy, the ratio of the detail-coefficient energies of the transient voltages across the positive- and negative-pole rectifier-side current-limiting reactors is calculated and used as the fault pole-selection criterion. Simulation results show that the proposed method can accurately distinguish faulty poles as well as internal and external faults. It exhibits strong tolerance to transition resistance, excellent capability in processing high-frequency components, and strong anti-noise ability. The method performs well under various working conditions and meets the protection requirements of flexible DC distribution networks.