The application of traditional droop control method in the micro grid would cause some problems of voltage and frequency fluctuations. Then, this paper proposes an improved droop control method based on sensitivity analysis. Because of the high line impedance of micro grid, the virtual impedance is added in the droop control method based on sensitivity analysis to adjust resistance-inductance ratio of lines. Meanwhile, the droop controller is improved for the better control accuracy. This paper takes error and error change rate of the micro grid voltage and frequency as the inputs of fuzzy control. In order to adjust voltage amplitude and frequency, the droop coefficient with PI structure is set online by fuzzy reasoning method. This paper analyzes the running characteristics of the switch between running modes and load shedding in islanding mode. Using this method can not only optimize those problems of voltage and frequency fluctuations, but also distribute power among these distributed generations after the load shedding. The feasibility and effectiveness of this control method is validated by these simulation results.