Accurate fault location is challenging due to the distribution network’s various branches, complicated topology, and the increasing penetration of distributed energy resources (DERs). The diagnostics for power system faults are based on fault localization, isolation, and smart power restoration. Adaptive multi-agent systems (MAS) can improve the reliability, speed, selectivity, and robustness of power system protection. This paper proposes a MAS-based adaptive protection mechanism for fault location in smart grid applications. This study developed a novel distributed intelligent-based multi-agent prevention and mitigation technique for power systems against electrical faults and cyber-attacks. Simulation studies are performed on a platform constructed by interconnecting the power distribution system of Kenitra city developed in MATLAB/SIMULINK and the multi-agent system implemented in the JADE platform. The simulation results demonstrate the effectiveness of the proposed technique.