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The connecting of distributed generation (DG) to the distribution network has numerous advantages. However, in the presence of DG some problems in coordination of protection devices will occur, due to changes in short-circuit levels at different points. Fault current limiter (FCL) is applied to limit the fault current levels and the effect of DGs on coordination of overcurrent (O/C) relays during the faults. The use of DG and FCL in distribution networks causes to some transient currents during fault conditions. Steady-state coordination methods do not result in accurate settings in such networks. A new method is proposed for coordination of O/C relays by considering the transient behaviour of the network. This method is based on the genetic algorithm and uses the dynamic model of O/C relays instead of the fixed characteristic curves. For this purpose, transient behaviour of DG and FCL are simulated and the relay operating status is calculated for all primary and backup relays to achieve the optimal settings of relays in transient condition. Simulations are carried out on a sample network and the results demonstrate that the method gives feasible and effective solutions for optimal coordination in the practical power system networks in comparison to the previous steady-state methods.