Accurate fault area localization is a challenging problem in resonant grounding systems (RGSs). Accordingly, this paper proposes a novel two-stage localization method for single-phase earth faults in RGSs. Firstly, a faulty feeder identification algorithm based on a Bayesian classifier is proposed. Three characteristic parameters of the RGS (the energy ratio, impedance factor, and energy spectrum entropy) are calculated based on the zero-sequence current (ZSC) of each feeder using wavelet packet transformations. Then, the values of three parameters are sent to a pre-trained Bayesian classifier to recognize the exact fault mode. With this result, the faulty feeder can be finally identified. To find the exact fault area on the faulty feeder, a localization method based on the similarity comparison of dominant frequency-band waveforms is proposed in an RGS equipped with feeder terminal units (FTUs). The FTUs can provide the information on the ZSC at their locations. Through wavelet-packet transformation, ZSC dominant frequency-band waveforms can be obtained at all FTU points. Similarities of the waveforms of characteristics at all FTU points are calculated and compared. The neighboring FTU points with the maximum diversity are the faulty sections finally determined. The proposed method exhibits higher accuracy in both faulty feeder identification and fault area localization compared to the previous methods. Finally, the effectiveness of the proposed method is validated by comparing simulation and experimental results.