Penetration of Distributed Generation (DG) increases continually in electric networks. Adding new DG units in a grid connected microgrid may result in exceeding fault current level above the rating of existing network's equipment and upset coordination of Overcurrent Relays (OCRs). Utilizing Fault Current Limiters (FCLs) between the microgrid (downstream) and main grid (upstream) is a well known approach to overcome the above-mentioned problems. Power Quality (PQ) and coordination between the upstream and downstream OCRs are affected by the conventional bidirectional FCL in case of fault in downstream. In this paper, utilization of Unidirectional Fault Current Limiters (UFCLs) is proposed to achieve an appropriate interaction between the upstream and downstream in a Meshed Distribution System (MDS). Different current limiting scenarios are analyzed to find the best performance of the installed FCLs with regards to the coordination of the OCRs and improvement of microgrid power quality.