The paper discusses the modeling of an isolated wind-diesel hybrid system (WDHS) with no storage for dynamic performance analysis and the system performances have been validated by simulation in Matlab/Simulink software. WDHS is a potential source of reliable power, where the problem of power unpredictability has been addressed effectively and can be employed even for critical loads. The paper elaborates the structure of the designed power system, the system architecture, the movement of control signals through common communication bus, modeling of all the major components in the system and validates the system performance using simulation software. The simulation results show that under any variation of the wind power, the system readjusts itself in such a way that the system frequency as well as the micro grid voltage is maintained constant at preset values, without diluting the active power flow required for the system. It is evident from the simulation results that the diesel generator provides the necessary frequency and power correction mechanism during low power output stages from the Wind turbine generator and the dump load provides the necessary compensation during high wind conditions for ensuring reliable and quality power in the system. © Research India Publications.