An active method for detection of islanded operation in a microgrid integrated with one or more inverters operating in parallel is proposed in this article. The method identifies the islanded mode by introducing a predefined pattern of small periodic step changes in the active power injected. Islanding is said to have occurred if the ratio of d-axis component of voltage at the point of common coupling (PCC) and d-axis current injected into the PCC remains constant over a complete cycle of the injected pattern. The method offers zero nondetection zone (NDZ). This article presents a detailed model-based derivation of the approach to islanding detection. Parametric studies are discussed to illustrate the working of the proposed approach. The case of multiple inverters is then presented, where the use of GPS signals has been proposed for time synchronization of the injected pattern. Simulation studies are presented to clarify the working of the scheme, for a single inverter case and for two inverters connected to a common grid. Finally, the proposed approach is also demonstrated experimentally for single inverter and two inverters case, with GPS signals used for time synchronization. © 1982-2012 IEEE.