The increasing penetration of inverter-based distributed generations (DGs) significantly affects the fault characteristics of distribution networks. Fault analysis is a keystone for suitable protection scheme design. This paper presents the modelling methodology for distribution networks with inverter-based DGs and performs fault simulation based on the model. Firstly, a single inverter-based DG model based on the cascaded control structure is developed. Secondly, a simulation model of distribution network with two inverter-based DGs is established. Then, different fault simulations are performed based on the Real Time Digital Simulator (RTDS). Theoretical analyses are conducted to justify the simulation results, including the equivalent circuit of distribution networks with inverter-based DGs and the solution method for loop currents.