A fault current limiting control and protection coordination method for a converter of a flexible direct current transmission system operating in an islanding state, wherein the current output command limit Imax is used to limit the current commandsof inner loop dq currents, and in the event of the fault of AC system, Imax is set equal to or slightly larger than a value for an AC line overcurrent protection section III. The value for the II section of the converter bridge arm overcurrent protection is smaller than the value for the II section of the AC line overcurrent protection or the value is equal; the set value for AC line overcurrent protection section I is smaller than the set value for converter bridge arm overcurrent protection section I; the value for proximal AC line overcurrent protection section II is less than or equal to the value for converter bridge arm overcurrent protection section II, and under such condition, the delay is longer than the AC line overcurrent protection section II. At the time of detecting a fault on the connected line side of the converter, the value of current output command limit Imax of the converter is changed from the allowable multiple of output current of the converter under normal condition to the value for the AC line protection section III in the event of fault. And, partial short circuit current is provided by limiting the output current of the converter, the AC fault is removed by the value for AC protection section III without affecting the normal operation of the converter. After the AC side fault is removed, Imax is restored to an allowable multiple of output current of the converter under normal condition. The method of switching Imax is that: pre-setting a series or curve of n groups of two-dimensional numerical values (U, Imaxj) (j = 1, 2, ... n), the limit current command value Imax is obtained by using interpolation or lookup table method, to limit the output current value of the converter operating in passive state.