Abstract: Though microgrid technology has many advantages, the instability of distributed generations in microgrid will make it hard to control system operation. So a hierarchical control method is proposed in this paper, in which the hierarchical control structure is divided into three levels. Each level accomplishes its own control tasks, and control command is transmitted to the lower level through communication channel. Moreover, the communication process of the control command should not affect the control system stability. Based on the droop control method, the first level of the microgrid hierarchical structure controls distributed generations and loads, and gives control signals to the second level to control frequency and voltage magnitude. In the third level, power exchanges between the microgrid and the power grid can be controlled. In this paper, Matlab/Simulink software is used to build a model of microgrid connected to power grid. The simulation results show that hierarchical control has good control effectiveness for mircrogrid.