Future grids will consist of many small and large microgrids that will require complex control of grid interaction as well as islanding operation. This paper addresses the control of islanded microgrids under dynamic system conditions. In this paper, a robust model reference modified adaptive proportional integral derivative (PID) controller is designed for voltage and current control augmentation of islanded microgrid against various load dynamics. The variation of load dynamics may cause the unsafe operation of the microgrid. The objective of the designed controller is to confirm the safe operation against voltage and current control under different load dynamics. The controller is designed based on selecting the desired reference model and controlling parameters. The effectiveness of the proposed controller is evaluated against the presence of load dynamics, harmonic sources, asynchronous machines, nonlinear and unknown loads. The results show that the proposed controller is capable of providing high tracking performance and safe operation for both the single and three phase islanded microgrid system.