Droop control is a common method in the universal microgrid applications. Conventional droop control is unpractical for low-voltage microgrid, where the line impedance among distributed generation units (DGs) is mainly resistive to generate the active and reactive power of DG is coupled. Besides, accurate reactive power sharing is not achieved due to the voltage deviation of DGs caused by disparate line impedance in microgrid. An improved droop control based on the virtual power source (VPS) and composite virtual impedance, which is constituted by a negative resistance and a negative inductance, is proposed for low-voltage microgrid. The virtual negative resistance counteracts the line resistance to decouple power. The reactive power sharing accuracy based on the virtual negative inductance and VPSs control increases through analysing the line and virtual voltage drop. Finally, the fractional-order PID controller is adopted to control the inverter voltage. The optimal controller parameters are obtained by the differential evolution algorithm. To verify the viability and availability of improved control strategy, simulations are carried out on MATLAB/Simulink.