In order to realize the condition-based maintenance (CBM) of protection systems in smart substation, this paper proposes a new way to assess the reliability of protection systems. Based on the characteristics of smart substations, a monitoring method reflecting the changes of the protection system function in terms of logical nodes is presented. According to the needs of the condition-based maintenance, reliability indices of the protection system are chosen. Along with these indices, a dynamic Markov reliability assessment model is built to quantitatively calculate the maintenance requirement under given conditions. Finally, a typical 220 kV smart substation is utilized to illustrate the application method of the assessment model. The result shows that the method has certain operability, and could provide reference for maintenance decision-making of the protection system in smart substations. This work is supported by National Natural Science Foundation of China (No. 51307059), Natural Science Foundation of Hebei Province (No. E2014502065), and Fundamental Research Funds for the Central Universities (No. 2014MS86).