Abstract: Maintaining the transient stability of virtual synchronous generator (VSG) controlled converter during grid fault is very important for the safe and stable operation of the system. Frequency stability is the premise and foundation of transient stability, which should be given priority, while the existing transient stability methods are rarely concerned. Therefore, a transient stability enhancement method of VSG with frequency stability improvement is proposed, which can simultaneously enhance the transient stability and frequency stability during the fault. First, the influence mechanism of inertia and damping of VSG on transient stability and frequency stability under two fault types is comprehensively analyzed. Next, an improved active loop control strategy with angular frequency deviation feedback is proposed, and the transient response of VSG is comprehensively analyzed based on small signal and large signal models. Then, a VSG parameter design method considering the optimal damping ratio is presented. Finally, the experiments verify the correctness of both the theoretical analysis and the proposed method.