Abstract: This paper investigates the stability issues in an islanded microgrid. A microgrid, once disconnected from the main grid, has to entirely depend on the Distributed Generators (DG), which are mostly intermittent renewable sources (e.g. PV, Wind Turbine etc.). This makes it necessary to achieve proper sharing of power, as it is not possible to supply the entire microgrid by a single source. Frequency and angle droop along with supplementary and adaptive control methods are analyzed and compared to identify the better method for accurate load sharing. However, the conventional droop methods, which are designed for inductive microgrids, allow an error in reactive power sharing when applied in a resistive microgrid. Therefore, a secondary control is proposed for improving the accuracy of reactive power sharing. The droop method alone is not enough in situations of severe power outages, like loss of a DG unit. Use of an Energy Storage System (e.g. Battery) is proposed to serve both as a storage unit for the intermittent sources and also to prevent voltage collapse by supplying the required voltage to the load bus. In addition to that, an advanced load shedding scheme is proposed to sustain the important loads, in times of extreme power crisis. Voltage unbalance caused by harmonic distortion, due to the presence of unbalanced/non-linear loads may result in voltage collapse. A selective harmonic compensation method along with local droop controller illustrates an effective way of restoring voltage balance, even with the harmonic polluted loads connected to the network. In addition to this, the role of a programmable resistance with shunt harmonic impedance (PR-SHI) in harmonic compensation is investigated in this paper. This method is shown to allow a reduced harmonic current and achieve an accurate sharing of the harmonic compensation effort among the DG units. Lastly, a scenario of excess generation, very uncommon to the conventional grid, has been discussed in this paper. Charging of battery unit and generation of heat energy, by using Smart Loads is proposed to be the most effective way of utilizing the excess generated power. This thesis presents a unique work of bringing together different control techniques used for stability of microgrid and analyzing and comparing them in order to find the best fit for each of the possible cases in an islanded microgrid. Lastly, it recommends solutions for each case.