This paper presents a novel fault-location scheme for unbalanced power distribution system in the presence of distributed generation (DG). The proposed scheme first identifies the possible fault locations using a new formulation of the impedance-based method. The new formulation overcomes the requirement of fault-type identification by using only one fault-location equation. The proposed equation is applicable to all shunt fault types. From the possible fault locations, the exact fault location is then identified by matching the measured voltage at the substation bus and each DG unit bus with calculated ones. The proposed scheme is applicable for all DG types without the need for their individual parameters. The balanced and unbalanced laterals and the capacitive effect of distribution line are also considered. The proposed scheme was evaluated and tested on a modified IEEE 34-bus distribution system using PSCAD/EMTDC software.