This paper proposes a novel control scheme for a hybrid energy storage system (HESS) for microgrid applications. The proposed two-stage control method is used to control the HESS to stabilize a microgrid’s voltage level and extend battery service lifetime during the coupling/decoupling of a microgrid from the main power grid. The conventional HESS control method (the filtration method) is not suitable to compensate for a microgrid’s power demand when it is decoupled from the main grid. This research focuses on using a superconducting magnetic energy storage (SMES) and battery HESS to assist with the microgrid coupling/decoupling process. To compensate for the instantaneous high power demand during decoupling, the battery will need to rapidly discharge. Moreover, batteries have difficulty supporting high discharging rates, which results in ineffective compensation of the power demand. In this paper, the high power density of the SMES system combined with the high energy density of a battery shows good performance on stabilizing microgrid bus voltage during the decoupling process. A novel energy management method for the HESS is proposed to improve the battery performance when the microgird coupled/decoupled from main grid. The sizing design is simplified based on the control methodology. Moreover, a SMES and battery HESS experimental platform is built to validate the proposed control methodology and its reliability.