The polarity reversal of the lightning‐generated first sky wave as a function of the observation distance is studied using a novel approach combining the finite‐difference time domain (FDTD) method and the superposition principle of electromagnetic waves. In this method, the sky wave is generated by radiation from the induced current produced by the motion of charged particles driven by the lightning‐radiated electromagnetic waves in the ionosphere. The horizontal and vertical components of the induced current density under the daytime and nighttime ionospheric conditions are evaluated. Their different contributions to the sky wave at different observation distances are analyzed in detail. Furthermore, a physical explanation for the polarity reversal in the time domain is proposed. It is found that, for relatively short observation distances (within ~200 km), the first sky wave is dominated by the component generated by the horizontal equivalent current in the Fresnel zone, while for longer observation distances (larger than ~300 km), the first sky wave is dominated by the component generated by the vertical equivalent current in the Fresnel zone. Since the polarities of the sky wave components generated by the vertical current source and horizontal current source are opposite, the polarity of the sky wave will reverse when increasing the observation distance.