A novel modification of the Z-source circuit breaker topology is presented for low voltage applications. An ultra-fast mechanical switch has been used in place of the solid-state switch (thyristor) in the Z-source circuit breaker to reduce the energy loss utilizing the very low resistance of mechanical contactors. The proposed modification also facilitates bi-directional current flow for distributed energy resource integration and improves ride through capabilities during downstream load transients. Existing Z-source circuit breaker designs utilize an impedance network to create a forced zero current crossing in the event of a fault in commutating thyristor to isolate the fault from source. However, all load current must flow through the thyristor during normal operation resulting in high loss due to on-state voltage drop of the solid-state switch. To validate the concept and develop proper control for this circuit breaker, both simulations and experimental studies have been carried out. The proposed breaker has been modelled in PSCAD for analysis. Additionally, an analytical estimation model of the system dynamics during fault has been developed to validate the simulations. A test circuit rated for 400 V and 20 A has been designed, constructed and tested.