The integration of Distributed Generation (DG) into distribution grid systems introduces problems in network operation, control and protection. Key issues associated with DG inclusion are voltage or current control, cost-effective operation, protection coordination and network transients. Better understanding of these issues and finding solutions to these problems are important to power industries. This paper has addressed the general issues and problems of DG implementation, and presented solutions for effective operation and control of the DG system. The impact of DG on distribution protection has been investigated and the level of fault contribution by DG during a fault has been determined. The contribution of DG to the improvement of power quality and reliability has been examined. Mitigation of voltage dip transients and reduction of harmonics in the network by DG have been analysed through modelling and simulations. Also, criteria to select DG technology and safety issues with DG integration have been discussed. Copyright © 2006 Inderscience Enterprises Ltd.