The AC power system is leading due to its established standards. The depleting thread of fossil fuels, the significant increase in cost and the alarming environmental situation raises concerns. An Islanded DC microgrid, due to its novel characteristics of being able to withstand faulty conditions, has increased the reliability, accuracy, ease of integration, and efficiency of the power system. Renewable energy sources, characteristically DC, have wide usability in a distributive network and, accordingly, less circuitry and conversion stages are required, eliminating the need of reactive power compensation and frequency sync. Constant power loads (CPLs) are the reason for instability in the DC microgrid. Various centralized stability techniques have been proposed in the literature; however, the grid system collapses if there is a fault. To compensate, an efficient distributive control architecture, i.e., droop control method is proposed in this research. The significant advantage of using the droop control technique includes easy implementation, high reliability and flexibility, a reduced circulating current, a decentralized control with local measurements, the absence of a communication link and, thus, it is economic. Moreover, it offers local control for each individual power source in the microgrid. To investigate the stability of the islanded DC microgrid with constant power loads using the droop control technique, a small signal model of the islanded DC microgrid was developed in MATLAB/Simulink. Simulations were carried out to show the efficiency of the proposed controller and analyze the stability of the power system with constant power loads.