Distributed generation (DG) units are often interfaced to the main grid using power electronic converters including voltage-source converters (VSCs). A VSC offers dc/ac power conversion, high controllability, and fast dynamic response. Because of nonlinearities, uncertainties, and system parameters' changes involved in the nature of a grid-connected renewable DG system, conventional linear control methods cannot completely and efficiently address all control objectives. In this paper, a nonlinear adaptive control scheme based on adaptive backstepping strategy is presented to control the operation of a grid-connected renewable DG unit. As compared to the popular vector control technique, the proposed controller offers smoother transient responses, and lower level of current distortions. The Lyapunov approach is used to establish global asymptotic stability of the proposed control system. Linearisation technique is employed to develop guidelines for parameters tuning of the controller. Extensive time-domain digital simulations are performed and presented to verify the performance of the proposed controller when employed in a VSC to control the operation of a two-stage DG unit and also that of a single-stage solar photovoltaic system. Desirable and superior performance of the proposed controller is observed.