Solid-state fault current limiters (SSFCL) in power systems are alternative devices to limit prospective short circuit currents from reaching lower levels. Fault current limiters (FCL) can be classified into two categories: R-type (resistive) FCLs and L-type (inductive) FCLs. L-type FCL uses an inductor to limit fault level and is more efficient in suppressing voltage drop during a fault. In contrast, R-type FCL is constructed with a resistance and is more effective in consuming the acceleration energy of generators during a fault. Both functions enhance the transient stability of the power system. In the present paper, a novel SSFCL is proposed to enhance power system transient stability and power quality. The proposed SSFCL uses both functions of an L-type and R-type FCL. SSFCL consists of four diodes, one self-turn-off IGCT, a current-limiting by-pass inductor (L), and a variable resistance parallel with an inductor for improvement of power system stability and prevention of over-voltage across SSFCL. The main advantages of the proposed SSFCL are the simplicity of its structure and control, low steady-state impedance, fast response, and the existence of R-type and Ltype impedances during the fault, all of which improve power system stability and power quality. Simulations are accomplished in PSCAD/EMTDC.