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With the growing deployment of microgrids, it has become urgent to investigate the microgrid behavior during transient faults and subsequent islanding conditions. The load type and the manner in which distributed generations (DGs) are controlled can have substantial impacts on the dynamic performance of microgrids. In this paper, impacts of different control schemes of the inverter-based DG and microgrid load types on the microgrid stability subsequent to fault-forced islanding are investigated. A microgrid model, simulated on Matlab/Simulink software, is analyzed including a mix of synchronous and inverter-based DG and a combination of passive RLC and induction motor (IM) loads. Simulation results show that in the presence of IM loads, the microgrid may lose its stable operation even if the fault is isolated within a typical clearing time. The critical clearing time of a microgrid is highly dependent on the microgrid control strategy, DG interface control, and load type. Induction motor loads can prove problematical to microgrid transient stability, particularly in situations in which the voltage dip can cause the induction motor to “pull out”.