Protective relays are important parts of the power system. The objective of the protection in power systems is to eliminate faults or unacceptable operating conditions for a component and related effects on the network. Fault elimination is usually done by isolation of the affected component. There are various types of faults, a special category are faults on generators (e.g. under excitation). But all other common transmission components are exposed mostly to faults as overvoltage and most of all over current, which is more commonly referred to as short-circuit. To ensure consistent reliability and proper operation, protective relay equipment must be evaluated and tested. The importance of the relay evaluation issue is linked to capability to test the relays and relaying systems using very accurate waveform representation of a fault event. The purpose of testing protective relays is to ensure correct operation of the relay for all possible power system conditions and disturbances. To fulfill this purpose, relay testing in varying network configurations and with different fault types is required. This paper describes a methodology in testing relays by using advanced digital simulator hardware