Nowadays, electrical industry is one of the main pillars of the economy and industry of each country. Along with the progress made in the field of production and distribution of electrical energy at worldwide, the need for electrical energy for consumers is also significantly increased. Regarding the limited fossil fule reserve and its environmental concern and low efficiency, a new attitude has been made in the electrical industry as the use of distributed energy resources. In order to increase the efficiency of electric energy systems with the aim of achieving more clean energy, a lot of researches about the integration of distributed energy resources to power systems has been done. To overcome the technical challenges of integrating these resources, the concept of microgrid has been proposed to integrate and exploit them in the context of a small-scale network. Based on structure and equipment, the microgrids are classified in three types of AC, DC, or hybrid AC/DC. The growth of digital loads and nature of electricity produced by most of the renewable energy resources can lead to the development of the low voltage DC microgrid concept into distribution network. One of the main challenges of DC microgrids is the lack of effective protection in the event of short-circuit fault, because there is not still a comprehensive technical instruction for their protection and the low fault current of DC microgrids in the islanded mode of operation makes the fault detection difficult. This thesis reviews the protection requirements and challenges of the islanded low volatge DC (LVDC) microgrid. A protection strategy for ring-bus LVDC microgrids is presented which employs intelligent electronic devices and solid-state circuit breakers (SSCBs). This scheme is developed based on monitoring the differential modified squared poverty gap index that is calculated using the normalized fault-imposed component of current. A backup protection scheme for the case of the SSCB failure and a reclosing scheme for restoring the isolated zone in the case of temporary faults are considered in the protection scheme. The proposed strategy is capable of detecting and classifying the pole-to-pole and pole-to-ground faults within microgrid lines and presents proper sensitivity for high-impedance faults. The merits of the developed protection strategy are demonstrated through several time-domain simulation case studies.