In this paper, the coordinated operation of fault current limiter (FCL) and inverter-interfaced load (IIL) is studied when providing frequency ancillary service (FCAS) during a fault condition. When the fault occurs as a contingency event, the voltage at point of common coupling (PCC) drops. Consequently, any frequency dependent load as a sensitive load connected to the PCC could not support the power system frequency by exceeding its consumption during a voltage sag. Therefore, the paper proposes a coordinated operation of the FCL and the IIL to keep the frequency in an acceptable range of operation. The FCL is capable of limiting the fault current as well as compensating the voltage sag when the fault happens. It is shown that when the FCL is employed, the frequency dependent load could participate in the demand side management properly during the fault occurrence without disconnecting from the grid. Different scenarios are investigated regarding the FCL’s impedance changing from resistive to inductive impedance. The simulation is carried out in PSCAD/EMTDC software.