An accurate digital distance relaying algorithm which is immune to mutual coupling effect and reactance effect of the fault resistance and the load current for the line faults in 765kV untransposed transmission lines is proposed. The algorithm can estimate adaptively the impedance to a fault point independent of the fault resistance. To compensate the magnitude and phase of the apparent impedance, this algorithm uses the angle of an impedance deviation vector. The impedance correction algorithm for phase-to-ground fault and phase-to-phase short fault use a voltage equation at fault point to compensate the fault current at fault point. A series of tests using EMTP output data in a 765kV untransposed transmission lines have proved the accuracy and effectiveness of the proposed algorithm.