In low-voltage microgrid, the space span between distributed generators is large, and the difference of line impedance has a great impact on the current sharing effect of inverter parallel system controlled by traditional virtual synchronous generator (VSG). The relationship between circulating current and power distribution and the influence of line impedance on power distribution are analyzed. On this basis, a circulating current suppression strategy of inverter parallel system based on virtual synchronous generator is proposed. In this strategy, the transmission power is introduced into the power control loop, and the bus voltage negative feedback and integral link are introduced into the reactive power voltage loop to realize the current sharing control under the condition of line impedance mismatch in the steady state. Then, by setting parameters and introducing virtual impedance, the circulation of dynamic process is reduced, and the system obtains good dynamic characteristics. Finally, MATLAB/Simulink simulation platform is used to verify the effectiveness of the proposed strategy.