It is a potential inducement of forest fire to ignite leaves when the high-resistance grounding fault of overhead lines of distribution networks riding through trees and bamboo occurs, so the reliable arc suppression of single-phase grounding fault of distribution network is very important. In this paper, a passive arc suppression strategy for single-phase grounding fault in distribution network based on flexible switching of dichotomy capacitor bank is proposed. After the input of over-compensated arc suppression coil, the capacitance needed to balance the over-compensated inductive current is calculated according to the voltage of arc suppression coil and the difference of zero-sequence current between fault line and non-fault line. According to the capacitance needed, the capacitor bank is selectively switched into the system step by step for the flexible compensation to achieve the purpose of arc suppression. Without measuring the capacitive current in real-time, this method reduces the complexity of actual operation. The simulation results show that the current at the fault point can be reduced to 0.022% of the original fault current, and the transient zero-sequence current can be suppressed effectively, which can achieve good arc suppression effect in all the cases with different fault resistances and fault locations.