The conventional droop control can’t adapt to large resistance-inductance ratio of line in low-voltage microgrid. Introducing virtual impedance can improve resistance-inductance ratio of line and increase operation stability, while it may lead to great voltage drop. The value setting of virtual impedance is influenced by difficult practical measurement of system virtual impedance and lines switching, which can’t be confirmed either. An improved control strategy based on dynamic virtual impedance is proposed. The designed dynamic virtual impedance is changed with the load current and the drop of voltage amplitude. The value of virtual impedance is adjusted adaptively and constantly under the work of the dynamic virtual impedance loop, so that the problem of virtual impedance value setting can be solved. At the same time, the voltage drop is reduced, circulating current is inhibited and the system power quality is improved effectively, while the system stability performance is satisfied. Simulation and experimental results verify the feasibility and effectiveness of the proposed control strategy.