In islanded ac microgrids, conventional primary control uses innerloop cascaded linear controller and outerloop droop to realize local voltage regulation and power sharing. However, it has a poor dynamic performance and fast rate of frequency change following disturbances. This paper addresses these issues by proposing a modified virtual synchronous generator (VSG) control. A Laguerre functionsbased discretetime model predictive control (LFDMPC) with a multiobjective cost function is incorporated as the inner loop; yielding large prediction horizon, improved dynamic response, and inherent overcurrent protection in the case of faults. The swingbased and the reactive power droop controllers also form the outer loop aimed at inertia emulation and power sharing. The merits of proposed approach are verified by comparisons with conventional droop and VSG controls. Detailed model simulations are conducted on a 2converter ac microgrid in MATLABSimulink to show the efficacy of the proposed controller.