Traditional droop control strategy has lack of the decoupling ability, so the efficiency and stability of the microgrid based on the traditional droop control strategy are easily affected by the uncontrollable coupling of the distributed generation (DG) units. In this paper, an improved droop control strategy incorporating the coupling compensation and virtual impedance is proposed to improve the efficiency and stability of the microgrid. Its coupling compensation comprises the angular frequency deviation compensation and voltage deviation compensation, which decreases the influence of the uncontrollable coupling. The virtual impedance can change the characteristics of the line impedance of the DG units and reduce their coupling. Therefore, the combination of the coupling compensation and virtual impedance can greatly reduce the power circulating-current of the microgrid and improve its dynamic performance. Then, an improved particle swarm optimization algorithm incorporating the multi-swarm and multi-velocity is taken to optimize the parameters of the coupling compensation with high accuracy and high reliability. Simulation and experimental results validate the high performance of the improved droop control strategy.