- Transmission line protective relaying algorithms usually require transmission line parameters as inputs and thus accuracy of line parameters plays a pivotal role in ensuring the reliable performance of relaying algorithms. Online estimation of line parameters is highly desirable and various methods have been proposed in the past. These methods perform well when the measurements utilized are accurate; they may yield erroneous results when the measurements contain considerable errors. Based on nonlinear optimal estimation theory, this paper puts forward an optimal estimator for deriving the positive sequence line parameters, capable of detecting and identifying the bad measurement data, minimizing the impacts of the measurement errors and thus significantly improving the estimation accuracy. The solution is based on the distributed parameter line model and thus fully considers the effects of shunt capacitances of the line. Case studies based on simulated data are presented for demonstrating the effectiveness of the new approach. 2008 IEEE.