Intermittent earth faults occur frequently in urban distribution networks, causing overvoltage in the whole system. This paper first presents the distribution characteristics of transient overvoltage caused by intermittent earth faults. Overvoltage level at the end of a sound line turns to be higher than that of the faulted line. In resonant grounding system with Petersen coil based on thyristor controlled reactor (TCR), overvoltage appears to be more severe due to response delay of compensation. Therefore, the influence on overvoltage level of Petersen coil compensation is analyzed, based on which, an overvoltage suppression method is proposed.