We propose a new protection relay system for selective and quick disconnection of fault area in a distribution system, which can be flexibly adopted for a large-scale introduction of distributed generators (DGs). When a fault occurs, a relay provides a binary signal which is activated if, for instance, its current exceeds a certain value. Each relay cannot locate the fault point with only its own signal. By utilizing signals from other relays together with its own signal, each relay can locate the fault, and then disconnect the DG if necessary. Because only a binary state signal is transmitted instead of the actual physical variable, the network traffic is much less than the case where the conventional protection system for a transmission system is applied to a distribution system. The followings are main results of a simulation on our proposed protection system: (1) the proposed protection system can successfully disconnect only a fault feeder,when all relays connected to the feeder use signals provided from the feeder sending-end and all other DGs on the same feeder, (2) in the case of the fault on a DG connected feeder, the DG can be disconnected within 60 msec.