For efficient operation of Distributed Generation (DG) is an essential aspect in future smart power grid. Distributed Generation is the interconnection of renewable sources that producing energy to the utility grid. A microgrid consists of both sources and loads. A microgrid can be operated in two modes. There are grid connected mode and islanded mode. A conventional controller (PI and PID) is proposed for the two modes of operation. During grid connected operation, all DG inverter system in the microgrid works in constant current control mode so as to supplies a constant power to the utility grid. When the system is detached from the main, all DG inverter system produces the power to the load and it should be switched to a voltage control mode because the voltage should not be regulated by utility. During this mode, the microgrid will supply a steady voltage to the local load. The smooth transition from grid connected to islanding mode and also reduce the transition time is the main objective of this work. The transition between grid connected and islanding modes performance when connected with and without controller is analyzed. A Phase locked loop (PLL) is used to determine the frequency and angle reference of the Point of Common Coupling (PCC). To assess the performance of the proposed control scheme MATLAB/SIMULINK tool is used.