To solve the issue of operational stability of a distributed generation system controlled by Virtual Synchronous Generator (VSG) method when it is integrated into distributed grid, a method to determine the impedance boundaries of a grid-connected VSG controlled converter is proposed. And the impedance boundary conditions are deduced which can satisfy the power control performance, stability limit, system load allowable range and small signal stability of the grid-connected converter at the same time. A configuration method of virtual impedance is then proposed which makes the system have both good dynamic control performance and stability. The Matlab/Simulink simulation results verify the effectiveness of the system impedance boundary and the virtual impedance configuration method. Some results of experimental cases are also given. This work is supported by Key Program of National Natural Science Foundation of China (No. 51837007).