This paper investigates the droop control of parallel inverters for an islanded mode of microgrid. Frequency and voltage droop control is one of power control and load demand sharing methods. However, although the active power is properly shared, the reactive power sharing is inaccurate with conventional method due to the unequal line impedances and the power coupling of active - reactive power. In order to solve this problem, an improved droop method with virtual inductor concept and a voltage and current controller properly designed have been considered and analyzed through the PSiM simulation. The performance of improved droop method is analyzed in not only low-voltage line but also medium voltage line.