This paper presents a comprehensive overview of power converters and their control techniques for AC microgrids. The aim is to give an insight and direction for researchers and applications on promising topologies, control, and application within future smart grid. The paper first focuses on presenting various power converter topologies used in AC microgrids. Then, suitable control techniques for grid-connected and islanded operation modes are critically reviewed and analyzed. Finally, challenges of these converter topologies and control techniques are identified along with their potential solutions.