This thesis describes the application of microprocessor based relays with internet communication capabilities in distribution protection systems. The traditional distribution protection system (recloser, sectionalizers) was configured to automatically isolate faulted circuits as well as to reenergize unfaulted loads after a certain number of reclosing operations. Internet Peer-to-Peer communication enables distribution relays to communicate with others connected to the communication network without having a master device. According to the results, the addition of peer-to-peer communication to a traditional distribution protection system significantly enhances its general performance eliminating undesired losses of unfaulted load. Additionally, it reduces outage duration as well as thermal and mechanical stress due to successive re-energizations under faults condition.