In this research work, an adaptive scheme for the coordinated protection of AC Microgrids using directional overcurrent (DOCR) relays is presented. Protection of AC MGs is a complex and challenging issue due to the dynamic nature of the network including, a) its capability to reconfigure the modes of operation ranging from grid-connected to the islanded mode, c) bidirectional-power flow capability, and c) integration of intermittent renewable energy resources with real-time variations in the resource availability. Consequently, the fault current contributions may largely vary depending upon the incident conditions on the network. Conventional protection schemes, generally designed for radial networks, and unidirectional power flow from the source end to the load may either mal-operate or exhibit very poor performance, if not adapted according to the dynamic conditions of the network. To address this issue, a communication-based adaptive protection scheme capable to adapt its settings according to the generation resource availability and network configuration is presented in this work. The proposed scheme consists of an intelligent central protection unit (ICPU) capable to update the settings and communicate it to the individual relays based on the pre-calculated offline settings. The directional overcurrent relays employed in the scheme use two-stage settings, i.e. definite time and inverse definite minimum time characteristics for the effective coordination among the downstream and upstream relays. An adaptive algorithm for ICPU operation is presented and a case study is implemented for a modified IEEE 9-bus system using DigSilent Power factory. The results for various scenarios including, a) grid-connected mode of operation, b) islanded mode of operation, and c) variable distributed generation mode are obtained and compared to the static scheme, which validates the effectiveness of the proposed scheme.