A new simulation approach is proposed in consideration of a saturation and a deep bar effect for the study of transients of three-phase squirrel-cage type induction motors. The mathematical model of an induction motor is expressed by the six differential equations of three-phase instantaneous voltage and current. The torque of an electric equation is related to the motion equations of motor and driven machine in the mathematical model. The values of reactance of stator and rotor are changed by the saturation of core caused by starting current. Also both the values of reactance and resistance of rotor bar are varied by the deep bar effect in the rotor core during starting. The calculation method of circuit constant that adds the influence of saturation and deep bar effect is proposed in this paper. The circuit constant of simulation model in consideration of saturation and the deep bar effect are decided by these computation methods in accordance with the conditions of rotation speed and current. If the large current flows, the leakage reactance of the stator and the rotor decreases by saturation. Moreover, the resistance of the rotor gradually decreases when the rotational speed rises from stop to synchronous speed, and the leakage reactance increases gradually. The calculated values were compared with the observed values of the examination machine of 1100 kW4P and an excellent agreement was obtained demonstrating the accuracy of the proposed simulation. Consequently, it is shown that the saturation and the deep bar effect are the essential factors to perform the accurate simulations of the induction motor. After checking the validity of the proposed approach, the simulation of the grounding faults was performed. In this study, all the simulation programs have been developed in the Matlab/Simulink environment.