This paper presents a comprehensive evaluation of the HVDC system’s impact on distance protection via systematic and realistic experimental tests, along with theoretical analysis of the root causes of the identified compromised protection performance. A methodology for quantifying the impact of Synchronous Compensation (SC) in supporting the distance protection operation is also established. In this work, the performance of two widely used physical distance protection relays have been evaluated using a realistic Hardware‐In‐the‐Loop (HIL) testing environment, where a total of 480 cases have been tested under a wide range of system scenarios. Representative cases with compromised protection performance are selected, where issues of under/over‐reach, faulted phase selection and impedance measurement are identified and analysed. Furthermore, a method for quantifying the required SC level to address the under/over‐reach issues resulting from HVDC systems is presented. The method establishes the relationship between the angle difference of the two-end fault current infeeds of the protected line and the SC level. Based on this relationship, the required SC capacity to constrain the angle difference within a targeted limit can be estimated, which offers a useful tool for system operators to appropriately size the SC’s capacity with additional valuable insights from the distance protection perspective.