The invention discloses a two-level flexible direct current power transmission converter fault protection and fault diagnosis method. The method provided by the invention is characterized in that a step 1 converter fault protection comprises: a step 101, converter outlet current signal acquisition and processing, a step 102, interruption of working of IGBT devices of a faulted converter, a step 103, the tripping-out of the alternating current system circuit breaker of the convertor station of the faulted converter, a step 104, working of normally functioning converters in a passive compensation state; a step 2 converter fault diagnosis comprises: a step 201, fault signal acquisition, a step 202, preprocessing of fault signals, a step 203, fault characteristic parameter calculation, a step 204, converter fault diagnosis of a converter fault diagnosis module by adopting a layering method. The two-level flexible direct current power transmission converter fault protection and fault diagnosis method is advantageous in that the steps are simple, the realization is convenient, the cost is low, the fault diagnosis identification rate is high, the practicability is strong, the use effect is good, and the popularization and the application are facilitated.