Large fault currents in a synchronous-based distributed generators (SBDG) can cause serious damage to the core and windings of the generator. This article proposes an adaptive grounding scheme to limit the ground-fault currents to a safe level. To do so, a high-impedance grounding configuration is designed to operate during the grid-connected mode to minimize damage to the generator during ground faults. An electronic switching mechanism is provided to identify the islanded mode of operation. This switching operation strategy will modify the grounding system to the low-impedance configuration during the islanded-mode of operation of the SBDG to ensure the steadfast operation of the overcurrent protection (OCP) relays to prevent the nuisance tripping by the protective devices. Furthermore, the schematic diagram of the proposed grounding configuration has been presented and discussed to ensure the safe decay of the generator field current during ground faults in the generator zone while the generator has been isolated from the grid. Simulation results for different test systems, including the IEEE 34-bus test system, validate the effectiveness of the proposed adaptive grounding scheme to ensure the steadfast operation of the inverse OCP and to limit the fault energy dissipation level inside the SBDG to a safe level by maintaining an appropriate grounding scheme during different operating modes.