This paper describes a new method for the seamless transfer between voltage and current control modes of a PCS in a microgrid. Usually, microgrid is connected to a utility through STS. In case of short circuit fault a huge current may flow through the STS, therefore, it is necessary to provide a method to reduce the STS fault current. In this paper a novel method to reduce the fault current is proposed, and the method can help to make a smooth operating mode change between current and voltage control of a PCS. The proposed method is applied to 10 kVA power system including utility source, STS, PCS, and load. Simulation results show the usefulness of the proposed method.