Due to the influence of feeder impedance, reactive power supplied by distributed generation (DG) based on traditional droop control could not be shared according to their droop gains. This paper proposes a control strategy which is based on virtual impedance, frequency/voltage and reactive power regulation for islanded microgrid. Virtual impedance is added to existing control loops to improve the characteristics of output impedance, weaken the power coupled caused by resistive component. Secondary regulation on the voltage and frequency deviations from droop control, improves the quality of voltage and frequency. Secondary reactive power regulation directly controls the distribution of reactive power. Reactive power sharing can be obtained independently from inverter output voltage, and it can limit the reactive power sharing errors. A microgrid simulation model is built in Matlab/Simulink simulation platform, and simulation analyses verify the validity and feasibility of the proposed strategy.