Abstract: To ensure the safe and stable supply of electric energy is the premise of constructing the novel power system. The fault diagnosis technology in the field of electricity safety needs continuous innovation and progress to adapt to the new demand of the power system. Arc fault cannot be accurately diagnosed as the main reason to restrict the electrical fire monitoring and prevention, which seriously threatens the safety of power supply and consumption. In this paper, the arc fault diagnosis methods based on different principles are analyzed. The arc fault test detection technology and related standards are introduced, and the possible future research direction is proposed. Finally, the technical challenges and development trend of arc fault diagnosis in novel power system are summarized.