In order to solve the instability problem caused by the changing output of distributed generation and load switching in the island microgrid, this paper puts forward a hierarchical control strategy based on the voltage and frequency power quality level. The voltage and frequency power quality are divided into three grades: superior, medium and poor. For the case that the power quality of the microgrid is excellent, the hybrid energy storage system is used to maintain the voltage and frequency stability of the microgrid. When the power quality of the microgrid is medium, the hybrid energy storage system and the drooping control are employed to maintain the voltage and frequency stability of the microgrid. If the power quality of the microgrid is poor, the droop characteristic of distributed generation curve is adjusted by the secondary frequency modulation theory similar with it in the power system, so that the voltage and frequency are keeping around the rated values. The simulation results verify the feasibility of the proposed hierarchical control strategy. Compared with the traditional control method, the hierarchical control strategy can improve the operating stability of the island microgrid when the distributed generation output is changing and load switching.