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The fault current level of microgrid is different between islanded mode and grid connected mode. This situation degrades the performance of traditional overcurrent protection schemes. Hence, this paper proposes a protection method based on feature cosine and differential scheme. Firstly, feature cosine is proposed; it employs ellipse equation and minimum least squares to quantify the united behavior about voltage and current. Secondly, fault current direction and feature cosine are analyzed when fault occurs at different locations of a typical microgrid, and then the difference of feature cosine between faulty and healthy section locations is obtained. Thirdly, based on feature cosine and differential scheme, the differential direction is defined and utilized to detect faulty section location. Lastly, various time domain simulation case studies, including different microgrid operation modes, grounding resistances, faulty types, faulty section locations, and noise influence, are conducted and demonstrate that the proposed protection has high accuracy.