AbstractIn modern distribution networks, integration of distributed generations (DGs) at consumer premises is common. However, islanding detection in such a grid‐tied distributed generation (GTDG) network is the topmost challenge to ensure power quality and reliable operation. This paper presents a modified passive islanding detection scheme (MPIDS) for the GTDG network, using a One‐D recursive Median filter (ODRMF) algorithm. Firstly, at the point of common coupling (PCC), 3‐phase voltage is acquired. Next, the ODRMF is employed to extract 3rd harmonic and residuals from the acquired voltage signal. Afterward, two novel islanding detection indices developed are: (1) First change detection (FCD), which is calculated from the residuals, and (2) delta selected harmonic distortion (∆SHD), which is computed from 3rd harmonic content of the voltage signal. Finally, variations in the two indices are compared with the threshold to identify islanding. To validate the efficacy of the presented MPIDS, rigorous simulations in MATLAB/ Simulink are conducted on the UL‐1741 and IEEE 13‐bus GTDGs systems under different conditions. The results illustrate that the presented strategy is highly reliable in all assessed conditions and can detect the islanding as well as non‐islanding incidents effectively under balanced and unbalanced load/generation conditions with a very low non‐detection zone.