This work presents new protection methods for addressing challenges related to integrating a fully inverter-based generation resource microgrid into the power distribution system. Renewable-energy-sourced microgrids offer promise in providing sustainable energy solutions to meet energy needs. Most of the widely used renewable resources and energy storage systems are interfaced with the power grid through power electronic devices, such as inverters. Diverse expertise is required for the design, construction, and operation of an inverter-based microgrid (IBMG). First, this dissertation provides a comprehensive overview of IBMG characteristics and highlights key obstacles in the design of these systems. The difference between the response of inverter-based resources and synchronous machine-based resources and the dependency of inverter response on its control modes are discussed. Second, a method for distribution system short circuit study considering inverter-based distributed generation is designed. Third, an Electromagnetic Transient (EMT) based inverter modeling for grid following and grid forming mode for both balanced and unbalanced distribution systems is proposed. Fourth, a method is proposed for controlling transient overvoltage in a microgrid-integrated power distribution system. Finally, a new protection method for detecting faults in an IBMG system helps to address the well-known issue of microgrid protection sensitivity and selectivity. The effectiveness of the overall framework is tested with small test systems and large IEEE test systems with relevant data sets. The studies show that the proposed approaches can improve the IBMG system design and increase the reliability of such systems.