This paper presents a novel recloser-fuse coordination protection for inverter-based distributed generation systems based on the use of RMS current comparators. In real-time, these comparators are responsible for analyzing current magnitude in upstream and downstream network directions; identify faults; and assess the recloser-fuse coordination status based on critical margins identified by the protection methodology. Once a mis-coordination is detected, some distributed generation units are strategically disconnected from the distribution network by gate turn-off thyristors. As a result of this action, short-circuit current is reduced to a satisfactory level, restoring the coordination between recloser and fuses in the grid. The proposed methodology has been implemented in a 12.47-kV grid with interconnection of 10 MW and 15 MW wind farms. Simulations have been carried out in ATP/EMTP. Significantly, the approach contributes to the adequacy and modernization of distribution systems with considerable tendency of distributed generation insertion.