A novel droop control with coupling compensation and inertia is proposed for a microgrid to achieve high dynamic performance and stability of distributed generation units. The coupling compensation scheme consists of angular frequency deviation compensation and voltage deviation compensation. They can reduce the influence of uncontrolled power coupling. The inertia scheme consists of angular frequency inertia and voltage inertia. They can slow down the change rates of the angular frequency and voltage and reduce their fluctuation magnitudes. The combination of this novel droop control method and virtual impedance can help achieve accurate power sharing. An improved particle swarm optimization (PSO) algorithm with multiswarm and multivelocity (MMPSO) is also proposed to optimize the parameters of the coupling compensation and inertia with high precision and high reliability. A simulated model and experiment platform of a microgrid are set up for testing, and the simulation and experimental results validate the excellent performance of the MMPSO and the effectiveness of the novel droop control method.