The invention relates to a power-frequency variable quantity protection method and system based on system setting impedance. The method comprises steps of: determining a system impedance maximum valueZmax, a system impedance minimum value Zmin, and a voltage variable quantity and a current variable quantity at a power-frequency variable quantity protection installation position according to voltage and current before and after a system line fault occurs; obtaining a protection result R1 according to the voltage variable quantity, the current variable quantity, the system setting impedance, the steady-state voltage at a fault point, and a power-frequency abrupt change quantity distance protection criterion; according to the voltage variable quantity, calculating new current variable quantities corresponding to Zmax and Zmin and executing the step 120 to obtain a protection result R2 corresponding to Zmax and a protection result R3 corresponding to Zmin; comparing the R2 with R3, performing power-frequency variable quantity protection according to R2 or R3 if R2 and R3 are equal, and performing power-frequency variable quantity protection according to the R1 if R2 and R3 are not equal. The method and system, by means of a conventional power-frequency variable quantity protection algorithm and protection setting calculation of the maximum and minimum impedance of the system, avoid the protection misoperation and refusal when a transformer is saturated.