A microgrid (MG) is supposed to operate in both grid-tied mode and islanded mode, smooth transition between which is critical for its reliability. Past efforts have shown that proper control of converter-interfaced distributed generation (DG) units can help maintain stability of MG against islanding. However, it remains unknown as how to quantify and when to initialize such controls. This paper presents a novel DG control strategy for MG islanding purpose using phasor measurements at point of common coupling. During the transition, the proposed controller adjusts DG outputs adaptively to compensate for system power imbalance. To verify the proposed method, a full MG dynamic model with different types of DGs is developed in PSCAD/EMTDC. Case studies demonstrate the advantages of the proposed method in improving load sharing, transient issues and system stability during MG islanding.