In recent years, the penetration of distributed energy resources (DER) as a solution for alleviating the economical, technical, and environmental concerns has increased. The main advantages of the electronically coupled DER units, commonly interfaced using a droop-controlled voltage-sourced converter (VSC), are their flexibility in providing controlled and high-quality power. With high penetration of distributed energy resources and microgrids, keeping them connected into the utility grid is of great importance for sustaining power system operation during various grid voltage sags/swells. DERs should be also stayed connected into the islanded microgrid during various fault conditions. Thus, the main goal of this dissertation is to manage both grid-connected and islanded inverter-based microgrids during fault conditions. The microgrid management scheme includes low-voltage ride-through (LVRT) and high-voltage ride through (HVRT) capabilities in the grid-connected operation mode and fault ride-through (FRT) capability in the islanded operation mode as well as a fault detection strategy and a coordinated protection design for the microgrid. In the proposed scheme, the effects of adopted reference frame, current limiting strategy, and inverter topology (three-/four-leg) are considered. The LVRT and HVRT calculations are performed in abc frame and they are implemented using primary and secondary control level of the microgrid for keeping it connected into the main grid, supporting the grid voltage, and supplying the microgrid loads with high quality. The FRT capability of VSCs in the islanded operation mode with limiting the VSC current and improving the quality of the VSC output voltage are provided using the proposed current limiting strategy which is implemented as a part of the VSC control system. Both proposed FRT schemes for grid-connected and islanded microgrids are based on the independent control concept of each phase. Using the main concepts of FRT, a new criterion based on a transient monitoring function is proposed for fault detection that is effective for various inverter topologies, main current limiting strategies, and all reference frames of the VSC multi-loop control system. A coordinated protection is one of the main requirement of the microgrid management scheme during fault conditions. Hence, the main protection schemes for microgrids are investigated and their advantages and disadvantages are presented. The merits of the proposed schemes are demonstrated through several time-domain simulation case studies using the CIGRE benchmark low voltage microgrid network.