The protection system plays a key role in maintaining the stability of the network, as well as preserving the basic components of the electrical network, such as generators, transformers, transmission systems, and electrical power connections. The smart grid system makes the power system more flexible and complex. So the detection of the fault and isolation it fastly is the main issue of the protection system. In this paper, an optimum solution for the protection has been presented. where an adaptive electronic relay for more reliability and self-healing has been presented. The algorithm of the relay operation has been validated based on the MATLAB software SIMULINK. Results validate the effectiveness of the proposed smart electronic relay at various sections of the smart grid system such as generator, transformer, transmission and distribution line, and load.