This paper summarizes the overview about the microgrid and the adaptive protection of the microgrid by using advance relay. Microgrid is a combination of interconnected loads, distributed energy resources (like PV cell, combine heat and power, wind energy, small hydro, etc.), and the storage unit (i.e. battery) within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. In adaptive protection scheme, relay changes its settings automatically when microgrid changes its operational state because the level of fault current is different in both working mode. The value of fault current is high in grid connected mode so the relay settings must be high and the fault current value is less in island mode, therefore the relay setting is less compared to the grid connected mode. Microgrid can operate in two modes, i.e. grid connected mode and islanded mode. A microgrid which has three switchboards (each switchboard has a generation unit and load) is designed and adaptive protection is implemented on it in Matlab/Simulink. The source of energy is wind in the entire generation unit and load is resistive of same power. Two fault locations have been taken into account in both the operating modes and the smallest portion of the load has been disconnected during fault time. Results of six cases have been discussed in both the fault locations and the status of microgrid circuit breaker is shown in the event table.