If large scale PV systems are installed and operated in primary feeder, the bi-directional power flow may be occurred and then the magnitude and direction of fault current can be changed depending on the fault location and point of common coupling of PV system, and time current curve cannot be properly maintained between protection devices. And also, it is difficult to obtain a proper time interval between protection devices because the conventional setting approach is applied even though PV system is installed and operated. Therefore, this paper presents 3 operation modes of setting approach for protection devices considering the operation conditions of PV system to obtain setting values of protection devices. Base on the modes, this paper proposes algorithm to calculate optimal time interval of protection coordination according to introduction capacity of PV system. In addition, this paper performs the modelling of distribution system with PV system and protection devices by using Off-DAS S/W, and analyzes the characteristics of time interval between protection devices such as substation relays, reclosers, customer relays, PV customer relays. From the simulation results, it is confirmed that the proposed operation modes and setting approach algorithms are useful and effective to protection coordination in the distribution system with PV system.