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Reactive power control is a fundamental issue in microgrids, especially during islanded mode operation with no support from the main grid. Lack of infinite bus, tightly coupled generation and consumption, and existence of nondispatchable intermittent renewable power sources reinforce the need for a new VVC scheme. This paper presents a new model predictive control (MPC)-based dynamic voltage and var control (VVC) scheme, which includes the dynamics of the microgrid in the VVC formulation. The MPC-based controller uses a simplified voltage prediction model to predict the voltage behavior of the system for a time horizon ahead. The advantage of this method is that it can avoid unstable voltage conditions in microgrids by prediction of the instability ahead of time. This method can also avoid voltage drops or swells in any of the phases of the system since the model can predict the voltage of each phase separately. Also, the presented method can be implemented online so it can efficiently use the time-variant reactive capabilities of the distributed generators to compensate for reactive power needs of the system. This controller is tested for different operating conditions of the microgrid and the simulation results confirm that the MPC controller successfully keeps the system stable and achieves a smooth voltage profile.