Due to frequency and voltage fluctuation resulting from the renewable energy variety, parameter uncertainty, and system disturbance, a novel coordinated control strategy is proposed to improve the dynamic stability of isolated wind–diesel hybrid power system. So, the frequency and voltage can also be regulated by taking advantage of adaptive sliding mode (SM) method and disturbance observer (DOB), which are based on the established whole hybrid system mathematical model. First, the DOB is constructed to estimate the source–load disturbance for isolated wind–diesel power system model. Second, the coordinated control strategy is constructed according to the estimated source–load disturbance value and state control model by using adaptive SM algorithm. Then, the output vector signal of adaptive SM controller is added to the synchronous generator side and the static synchronous compensator, respectively; therefore, the proposed coordinated control strategy can regulate the frequency and voltage simultaneously. Experiment studies are performed by real-time digital simulator to validate the effectiveness of the proposed coordinated control strategy for the isolated hybrid system under different operation points.