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Small wind turbine systems offer services to critical loads during grid faults and also connected back to grid in normal condition. The connection of a wind energy conversion system to the grid requires a robust phase locked loop (PLL) and continuous monitoring of the grid conditions such as overvoltage, undervoltage, overfrequency, underfrequency, and grid outages. This paper describes a flexible control operation to operate a small wind turbine in both stand-alone mode via planned islanding and grid connected mode as well. In particular, a proper monitoring and control algorithm is required for transition between the modes. A wavelet based energy function is used for detection of grid disturbances as well as recovery of grid so that transition between the modes is made. To obtain good power quality LCL filter is used to reduce ripples. PLL is used for synchronization whenever mode changes from stand-alone to grid connected. Simulation results from a 10 kW wind energy conversion system are included to show the usefulness of the proposed methods. The control method is tested by generated gate pulses for single phase bridge inverter using field programmable gate array (FPGA).