A novel approach on soft transition from stand-alone (SA) mode to grid-connected (GC) mode for uncontrolled prime mover-driven squirrel cage induction generator (SCIG) is presented in this article. The distributed generation unit (DGU), consisting of SCIG along with back-to-back converter, is initially controlled to supply SA load with fixed voltage and frequency. A virtual power-based control (VPC) is developed for the DGU to ensure zero power exchange with the grid, for smooth grid synchronization (GS). The proposed controller is generating the required magnitude and angle of the inverter voltage without use of the phase-locked loop. The load-side voltage source converter is controlled by the VPC during GS and GC operation. Variation in power reference, in GC mode of operation, is also established with necessary change in the angle of the inverter voltage vector. The machine-side voltage source converter is controlled by three-stage control technique, to maintain the dc-link voltage, throughout the operation. Implementation of the proposed control is performed in simulation environment successfully. The effectiveness of the control is demonstrated experimentally on a scaled laboratory prototype.