Microgrid power system has the characteristics of distributed power operation flexibility and the big fault char-acteristic difference between grid connected and islanding way. Realizing microgrid protection satisfying the quick acting and selective requirement is one of the difficulties in microgrid technology. In order to realize rapid and accurate fault location and isolation, this paper proposed the microgrid transient polarity comparison protec-tion adapting to the different operation modes of grid connected and islanding way. Based on the research on re-alizing the decomposition method step by step of transient high-frequency signal by Mallat algorithm of wavelet transform, a principle and algorithm of microgrid transient polarity comparison protection is proposed according to transient signal comparison, and the realizing scheme of microgrid transient polarity comparison protection equipment is mainly designed, and MATLAB is used to simulate the analysis to verify the protection scheme.