This paper describes the improvement method of distance relaying algorithm for the underground transmission cables. Distance relaying algorithms have been mainly developing to protect the overhead transmission lines than the underground cables. If the cable systems are directly protected using distance relaying algorithm developed for overhead line without any improvement, there will be really occurred many misoperation in cable systems, because the cable systems consist of the conductor, the sheath, several grounding method, cable cover protection units(CCPUs), and grounding wire. Accordingly, the complicated phenomena are occurred, if there is a fault in cable systems. Therefore, to develope a correct distance relaying algorithm, such cable characteristics should be taken into account. This paper presents the process to improve distance relaying algorithm which is now used. REal cable system was selected to establish modeling in EMTP and ATP Draw. It was discovered through the detailed simulation during the fault that the large error existed between impedance measured at the relay point and real impedance is due to the resistance of grounding wire in each grounding method. And also compensation factor obtained by the simulation is proposed in this paper. It is proved that the factor proposed can fairly improve the accuracy of impedance at the relay point. It is evaluated that the protective ability will be really much improved, if the algorithm proposed in this paper is applied for cable systems of utility.