Recent developments in hybrid microgrid systems have brought challenges to the development of new power conversion circuits, which integrate multiple input and output. In traditional hybrid microgrid, interlinking converter integrate AC and DC buses but, it cannot integrate storage system. It require more power conversions, device count to transfer power from one side to other side. It reduces power quality and overall efficiency of the system. The recent development in new power conversion circuit, can integrates multiple input and output. The use of these multi-port power converters in hybrid microgrids are integrating different DC source to centralized DC bus. These existing multi-port converts do not fulfill the requirement of DC-DC/AC power conversion to interface storage system with AC and DC buses. On this basis, this paper proposes a new isolated three port converter (ITPC) having storage port, DC microgrid port and AC microgrid port. It improves the performance of hybrid microgrid with all kinds of power conversions like AC/DC-AC, AC-AC/DC, DC-AC/DC, and AC/DC-DC. This ITPC tested with hybrid microgrid using MATLAB/Simulink® and comparative results with traditional microgrid architectures are presented in the aspects of power transfer capability, energy management of the storage system, and power quality of the microgrid system. © 2016 IEEE.