Micro-grid consists of micro-sources which adopt environmentally friendly and reliable power sources such as Fuel-Cell and Micro-Turbines with independent real and reactive power control capability for providing premium power quality. This paper deals with the basic aspect of dynamic modeling and the stability analysis of the micro-grid system. The fundamental frequency model of the micro-source inverters are considered to form a dynamic model of the micro-grid system Stability analysis is performed based on the linearized dynamic model of the micro-grid system Case study results show the parameters affecting the stability of the micro-grid.