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Model Predictive Control (MPC) uses the model of system at current time to predict the system behavior at the future sampling interval in the prediction horizon and sets a number of variables to their references due to their controllability from input variables. This paper concentrates on the design and analysis of a controller for Distributed Generation (DG) microgrids in islanding and grid connected operation modes using a Receding Horizon MPC scheme. In this contribution, active and reactive powers are used in a cost function as an inner control loop to produce switching states. Two outer voltage and frequency droop loops share active and reactive powers between DGs in the microgrid. The design concept of the proposed control system is evaluated through simulation studies and experiment under different test scenarios. The impact of the simulation and the experimental results shows that the operations of the DG units within the microgrid can be coordinated effectively under the proposed control system to ensure stable operation of the overall microgrid and power quality improvement.