New techniques for grid monitoring, protection, and control have been perfected, and their judicious application can help reduce the frequency and severity of catastrophic failures. This article describes the development of an innovative multiagent approach to prevent and control catastrophic failures in large power systems. The research has created understanding of the origin and nature of catastrophic failures. This is achieved by an analysis of hidden failures in protection systems. Vulnerabilities associated with the power system, the information network, and the communication network are also evaluated. The approach is characterized by the extensive use of real-time information from diverse sources, coupled with the development of an evolving dynamic decision event tree. A novel multiagent based platform is used to evaluate system vulnerability to catastrophic events taking in account the market environment and competing entities. Several new concepts associated with wide-area measurements and controls, networked sensors, and adaptive self healing are used to reconfigure the network to minimize the system vulnerability. Approaches developed in this research will provide important solutions for power systems and other interconnected networks of the future.