The calculation of short circuit current is an important foundation for fault analysis of power system integrated into distributed generation. Firstly, the transient characteristics of induction generator (IG) are investigated, and the analytic formula of its stator current under three-phase short circuit in distribution network is derived making use of the steady-state equivalent circuit of IG. Then the three-phase short circuit currents of IG are compared and discussed when the short circuit occurs near to and far from it. Subsequently, according to the characteristic of forced component proportion between stator flux and rotor flux of IG, the impacts of its rotor speed on direct-current and periodic components are studied. Finally, an evaluation method to determine the current peak of three-phase short circuit for induction generator in distribution grid is proposed based on the change law of IG rotor speed under the grid fault. The correctness of the proposed method is verified by the fifth electromagnetic transient model of IG in PSCAD/EMTDC simulation software.