This paper proposes a new loss-of-excitation (LOE) protection criterion, namely the impedance circle of oscillation boundary criterion, to solve the problem that traditional LOE protection impedance unit cannot distinguish LOE from oscillation. Firstly, the equation of impedance trajectory at generator terminal is established, and based on the equation, through the analysis, the conclusion can be drawn that when low excitation oscillation occurs, the deeper the extent of low excitation is, the smaller the impedance circle at generator terminal becomes, and the smaller circle is included in the bigger one. Then according to that conclusion, the impedance circle of oscillation boundary criterion is proposed. When the impedance trajectory measured at generator terminal enters into the impedance circle of oscillation boundary, loss-of-excitation is thought to occur and the protection devices act directly. Based on the impedance circle of oscillation boundary criterion, a new loss-of -excitation protection scheme is proposed and the effectiveness of the scheme is verified by the specific test case.