Abstract: For the stability analysis of AC microgrids, the conventional methods including the eigenvalue analysis in time domain or Nyquist Criterion in frequency domain are facing curse of dimensionality in modular application and unable to give effective instructions independently for the design of the subsystem of AC microgrid and the control parameter tuning. Aiming at this problem, this paper proposed a decentralized impedance-based method for the stability analysis of AC microgrid, in which the AC microgrid was transformed into two decoupled DC subsystems by Park transformation and decoupling control. Then the invariant impedance specifications were defined for each subsystem in terms of the rated bus voltage and rated capacity of each subsystem. Based on the decentralized impedance-based criteria, a modular design can be realized and the overall stability of AC microgrid can be guaranteed at the same time. The effectiveness of the proposed method was verified by MATLAB/Simulink simulation.