Virtual Synchronous Generator(VSG) technology is of great significance to improve the dynamic characteristics of grid-connected inverters and enhance the friendliness of contravariant power to the grid. In order to solve the problem of lacking a set of methods to design VSG’s dynamic characteristic parameters and further promote the engineering design and application of VSG, this paper established the second-order equivalent model of VSG’s active power-frequency controller based on the small signal analysis and analyzed the influence of parameters J and Dp on VSG’s control of active power. The parameter domain of J and Dp in the dynamic process of under-damping, critical damping and over-damping of VSG is established and the parameter configuration methods based on the limitation of overshoot and transition time are proposed. At the same time, first-order equivalent model of VSG’s reactive power-voltage controller based on the small signal analysis is established, the influence of parameters KU and KQ on the dynamic characteristics of VSG’s control of reactive power is analyzed, the parameter domain of KU and KQ is established and the parameter configuration methods based on the limitation of transition time are proposed. Practice shows that the proposed configuration methods have a great reference value for the parameter selection in the VSG technology research and engineering application. Finally, the simulation results of Matlab/Simulink platform are used to prove the correctness and validity of the proposed VSG parameter configuration methods.