The amplitude and phase angle of the fault current in photovoltaic power plants (PVPPs) are significantly influenced by the control system of the grid-connected inverters, unlike in a conventional synchronous source. Hence, PVPPs may adversely affect the performance of the current differential protection designed for synchronous sources-based power grids. In order to study the performance problem of current differential protection on AC transmission lines, an analytical expression of the fault current in the PVPPs was deduced, and the fault current characteristic was extensively analyzed. Based on this analysis, the ratio of differential current over restraint current was initially derived in this study; this ratio is observed to be affected by the control system parameters, power grid system parameters, fault resistance, and fault types. Moreover, the dynamic characteristics of this ratio can be clearly observed based on a three-dimensional diagram. Furthermore, the operating performance of the current differential protection was analyzed under different influencing factors. The mathematical analysis presents that the amplitude ratio of the fault current on both sides of the line is larger than nine and that current differential protection will operate reliably in any case. Meanwhile, the theoretical analysis and simulation results show that the current phase angle difference may become an obtuse angle in case of an ungrounded fault, which will cause inaccurate operation of the current differential protection. The results of this study will provide guidance for the engineering application of current differential protection in case the PVPPs are connected to a power grid.