This paper investigates the islanding operation of mini-hydro generation connected in a Provincial Electricity Authority (PEA) distribution network. A real test system with three mini-hydro generating units was set up to examine their dynamic and steady state performance. Voltage and frequency regulation of the generating units were inspected. Test results show that mini-hydro generating units connected in the distribution network are capable of operating in the islanding mode without sacrificing the system stability. Hence, in the case of supply outage or substation maintenance required to de-energize some equipment, the islanding operation of mini-hydro generating units will have a great opportunity to improve the continuity of service.