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This paper introduced and proposed the voltage unbalance of distributed generation (DG) terminal output as new monitoring parameter for power islanding detection. This paper also presented a simple and novel detection algorithm, which effectively combines the detection results of the conventional parameter, voltage magnitude, and a newly proposed parameter. We tested the proposed method using several distribution network conditions including not only islanding operation conditions, but also non-islanding conditions of normal network load variations. The test results showed that the proposed parameters and algorithm are capable of correctly detecting the islanding operation not affected by variation of DG loading and also have a good selectivity for islanding conditions and non-islanding conditions.