Line-interactive uninterruptible power supply (UPS) systems are good candidates for providing energy storage within a microgrid to help improve its reliability, economy, and efficiency. In grid-connected mode, power can be imported from the grid by the UPS to charge its battery. Power can be also exported when required, e.g., when the tariffs are advantageous. In stand-alone mode, the UPS supplies local distributed loads in parallel with other sources. In this paper, a line-interactive UPS and its control system are presented and discussed. Power flow is controlled using the frequency and voltage drooping technique to ensure seamless transfer between grid-connected and stand-alone parallel modes of operation. The drooping coefficients are chosen to limit the energy imported by the UPS when reconnecting to the grid and to give good transient response. Experimental results of a microgrid consisting of two 60-kW line-interactive UPS systems are provided to validate the design.