Environmental concerns and limits on fossil fuels result in increasing integration of renewable energy source (RES) units such as photovoltaic and wind power systems. Since most of the RESs produce DC electric energy and use of modern DC consumers such as LEDs and sensitive computer loads is increasing, DC microgrids are gaining great attention in the research community. To extend the DC microgrid concept as an efficient energy component of future smart grids, their technical challenges should be addressed. The lack of an effective protection system is one of the main challenges of DC microgrids; this system should be able to detect the fault condition and to protect the network equipment against the large fault currents. Due to the low thermal inertia of power-electronics interfaces of RESs, their current should be properly limited to prevent damage to the semiconductor switches. Another main requirement of an effective protection scheme is that the DC microgrid should back to the normal operation after the fault clearance, as soon as possible. The goal of this thesis is to design a current limiting scheme for DC-DC converters of islanded DC microgrids that are commonly controlled using the conventional proportional-integral controllers and the hierarchical control structure. In the proposed method, the current reference of the current control loop is dynamically regulated by the smooth set point automatic adjustment with correction enabled (SSPAACE) technique during fault conditions. The main advantage of the proposed scheme is it can be implemented in the primary control level of the hierarchical control system. Without the increase of cost and complexity, the proposed limiter is able to limit the fault current contribution of DC-DC converters with proper speed and accuracy and to facilitate the return of DC microgrid to the normal operation.