Given that the distributed generations（DGs） are normally equipped with energy storage devices when a microgrid is in isolated island operation state， a frequency control strategy based on virtual inertia method is developed. This method enables the DGs not only to maintain the droop characteristics， but also to have proper inertia as synchronous generator rotors have. This strategy can support the frequency of a microgrid and thus improve its frequency stability. The problem of power oscillations between DGs when applying this control strategy in microgrid is analyzed through a two-DG system. The oscillations are restrained by optimizing the main circuit and controller parameters. Simulation results from PSCAD/EMTDC verify the effectiveness of this control strategy.