In recent years, distributed generation (DG) systems have become a signicant power source for remote areas and local loads. Almost all of the DG sources are inverter-interfaced to deliver the power to the loads in the desired form, which is ac. On the other side, most of the loads are very sensitive not only to changes in voltage levels and frequency of the power supply system, but also to harmonic distortion. Therefore, the use of diesel driven synchronous generators and similar power sources will be limited for many applications in the near future because of the high harmonic content of the output voltage when a non-linear load is applied. A solution to these limitations is to use an inverter to generate high quality sinusoidal voltages within a system which controls the instantaneous voltage. Proliferation of distributed resource (DR) units in the form of distributed generation (DG) and distributed storage (DS) has brought about the concept of the microgrid. A microgrid is dened as a cluster of DR units and loads that can operate in a) the gridconnected mode, and b) the islanded mode. Proper operation of the microgrid in both the grid-connected and islanding modes requires the implementation of high-performance power ow control and voltage regulation algorithms. Grid-connected operation consists of delivering power to the local loads and to the utility grid. In the absence of the grid, the inverters are normally operated in the island mode, in which inverters are responsible for establishing the ac bus voltage and supplying a high-quality power to the loads. This research presents a novel control strategy for parallel operation of inverters within the distributed ac power supply systems. The proposed control technique, based on the droop control method, uses only locally measurable feedback signals. This method is usually applied to achieve good active and reactive power sharing when communication between ii the inverters is dicult due to physical separation. To improve the voltage regulation and reactive power sharing, integrating the direct-current vector control (DCVC) with droop method is proposed in this thesis.