This　paper　proposes　a　time-domain　method　to　calculate　the　fault　response　in　multiterminal　dc　(MTdc)　grids　and　the　performance　of　hybrid　dc　breakers.　The　proposed　method,　based　on　traveling　waves:　1)　provides　a　sound　representation　of　fault　performance　by　considering　all　created　traveling　waves;　2)　introduces　a　new　approach　to　estimate　the　reflection　coefficients;　and　3)　provides　an　approximation　of　the　worst　case　fault　location.　Then,　based　on　the　analytical　results,　three　parameters　of　the　hybrid　dc　circuit　breaker,　i.e.,　current　limiting　reactor,　arrester　rated　voltage,　and　time　delay　are　optimally　selected　with　respect　to　maximum　overcurrent,　maximum　overvoltage,　fault　clearance　time,　and　energy　absorption　in　arresters　through　multiobjective　optimization.　Accuracy　and　performance　of　the　proposed　method　are　evaluated　and　verified　by　time-domain　simulation　studies　in　the　power　systems　computer　aided　design　(PSCAD)/electromagnetic　transients　including　DC　(EMTDC)　environment　using　frequency-dependent　models.　The　results　confirm　reasonable　accuracy　of　the　proposed　fault　performance　calculation　and　represent　a　further　step　towards　optimized　design　of　hybrid　dc　circuit　breakers.　©　1982-2012　IEEE.