This paper presents a novel fault location scheme of DC line in modular multilevel converter (MMC)-based multi-terminal DC (MTDC) grids. Considering the low-inertia characteristics and the meshed topology, the scheme, based on traveling-wave principle, is divided into three steps, namely, faulty pole identification, faulty segment determination and fault-distance calculation. With accurate amplitude, polarities and arrival times of the first arrival current traveling waves (FACTWs) collected from time-synchronized measurements taken just at the converter stations, the proposed scheme can correctly determine the faulty pole, the faulty segment and the precise fault location. The continuous wavelet transform (CWT) is deployed to extract the required features of the input signals at the DC lines. Since the scheme merely needs the features of FACTWs, the practical difficulties of detecting subsequent traveling waves are avoided. A four-terminal MMC-based high voltage direct current (HVDC) grid was built in PSCAD/EMTDC software to evaluate the performance of the fault-location scheme. Simulation results for different cases demonstrate that the proposed fault-location scheme has high accuracy, good adaptability and reliability. Furthermore, the algorithm can be used for a MMC-MTDC grid with any number of meshes.