This paper describes the development of a new islanding detection system based on the change ratio of harmonic admittances, voltages and currents of the power system between the response measured when the main utility supply is connected to the distributed generation site and that measured when the distributed generation site is operating in islanding. The results of verification tests conducted at the Akagi Test Center of CRIEPI and at several hydroelectric power plants of Kansai Electric Power are also described. No disturbance to the grid is caused through this mechanism because it uses only harmonics characteristics without injecting any active influence to the grid. In addition, the islanding condition can be detected accurately regardless of the grid state even when the local generation power and the loads in the islanding system are perfectly balanced.