This paper presents a disturbance observer approach for frequency regulation for a low-inertia microgrid system consisting of various distributed energy resources (DERs). The mismatch in load and generation is estimated using the disturbance observer and is used as a supplement to the classical integral controller to vary the set points of various controlled DERs. Since the disturbance-observer-based approach is an algorithm based on local frequency measurement, it reduces the capital expenditure in implementing additional sensors. Further, in case of microgrids, the communication infrastructure is mostly built with public networks, which can introduce random delays. Therefore, the performance of the proposed scheme is also tested in the presence of random communication delays. A sensitivity analysis is also presented to show that the performance of the proposed control scheme is much better than the integral controller even when there are variations in the system parameters. Finally, the proposed approach is tested in a laboratory-scale microgrid setup in which the frequency of a synchronous generator is controlled using the disturbance-observer-based approach. The results obtained in the experimental setup show that the proposed approach can be easily implemented in a real system in order to achieve adequate frequency control. © 2007-2012 IEEE.