The invention discloses a smart grid overload current breaking protection method based on giant magnetoresistor susceptibility. According to the current breaking protection method, overload current passes through a wire of a current breaking protection device to enable a U-type soft iron to generate a magnetic field, the resistance of one group of giant magnetoresistors located at the lower part and the upper part of an isolation shielding plate is increased, the resistance of the other group of giant magnetoresistors is decreased, resistance signals formed by the resistance change of the giant magnetoresistors are converted to voltage output signals, the voltage output signals are subjected to amplification, DC blocking, filtering and comparison, voltage signals with low level jumping to high level are obtained, the voltage signals are those which can cause starting and triggering of a current breaking protection control module, triggering on the current breaking protection control module is realized, and current breaking of a current breaking protection execution module is thus caused. The overload current is used to pass through the wire of the current breaking protection device to enable the U-type soft iron to generate the magnetic field, and through polar attraction and repulsion between magnets, high-sensitivity current breaking protection on the smart grid circuit is further realized.