This paper presents a scheme to increase the sensitivity of overcurrent protection. The proposed scheme applies wavelet packet transform, since it can preserve both time and frequency information with high resolution. The proposed scheme demonstrates its feasible performance in detecting short circuit faults, calculating fault location with moderate accuracy and detecting nonlinear high impedance faults. In addition, the proposed scheme examines the load current continuously and has the ability of changing the relay pick up value adaptively. The examined tested cases include different internal
short circuit fault conditions, different nonlinear high impedance faults, and non fault situations such as normal load changing. The obtained results indicate that the developed scheme is fast, robust, reliable and suitable for power distribution systems.