The method of neutral grounding is perhaps more difficult to select than any other feature of power system. It is because of the large number of factors that must be considered. In paper are analysed and compared medium voltage distribution system neutral grounding methods. Paper presents an algorithm for selection of neutral grounding type (isolated neutral system, compensated neutral system, system with low resistance neutral earthing). Proposed algorithm takes into account power line type (overhead line, underground cable line or both of them together), medium line voltage (6kV, 10kV, 20kV), earth fault current, etc. Based on this algorithm, is developed new software “MVES-GS 2012” (Medium Voltage Electrical System Grounding Selection) by the authors of this paper. This software can be useful for distribution network exploiting engineers when trying to find network’s optimal neutral grounding system.