In this paper, we propose a new decentralized multi-agent approach for detecting fault equipments in power system. The proposed method consists of several SSAGs, DSAGs and LAGs. A SSAG is installed in each substation and controls its substation. A DSAG is installed in each distribution substation and receives the control instructions from SSAG or LAG. LAG is installed in any substation and controls the transmission line. In order to demonstrate the capability of proposed multi-agent system, it has been applied to a model power system that has 7 substations and 8 distribution substations. The simulation results show that the proposed multi-agent approach is effective and promising.