The critical challenges with integrating renewable energy into the grid are smooth power flow control, isolation between the high-voltage and low-voltage networks, voltage regulation, harmonic isolation, and power quality regulation. This paper considers the design and construction of a two-stage DC-AC solid-state transformer based on wide bandgap (WBG) semiconductor technologies, an optimized medium-frequency transformer, and PI and dq controllers for supplying urban area electric drive systems and microgrid applications. The designed SST consists of a dual active bridge (DAB) DC-DC converter followed by a DC-AC three-phase inverter. Each stage of the SST was simulated with independent controllers. The proposed system was initially developed in MATLAB/Simulink and a laboratory prototype was constructed to verify the results experimentally. Resistive and inductive load were used to test the load disturbance to evaluate the voltage regulation performance. This work has comprehensively provided the performance of a double stage (DC-DC and DC-AC converter) by taking into consideration input voltage, load disturbance, and voltage tracking both in simulation and experiment. The dual active bridge with its controller is able to maintain the desired output reference voltage with minimal voltage ripples under input voltage fluctuations and load variations. Similarly, the three-phase DC-AC converter’s controller exhibits better performance in tracking the desired reference voltage and producing well-regulated AC voltage with low harmonic distortion.