In this paper, a dynamic power limiter at the point of common coupling (PCC) of a micro-grid is proposed. A 60 Hz, step-down transformer is generally used at the PCC to connect the micro-grid to the power system grid. Substitution of the conventional 60Hz transformer by a dynamic power limiter has the following advantages: 1) Bi-directional active-power control capability at the PCC which results in enhanced micro-grid power management system during grid-connected operation, 2) Smooth transition from islanding to the grid-connected mode without the need of grid frequency synchronization, and 3) Extra degree of freedom due to the presence of active-power controller in a possible deregulation and market strategy within the micro-grid. The proposed dynamic power limiter is a high-frequency isolated power-converter system comprised of a high-frequency step-down transformer and three-phase to single-phase matrix converters. The matrix converters are modulated with a new PWM strategy for bi-directional active and reactive power flow control. Simulation results presented verify the operation of the proposed dynamic power limiter.