This paper presents a proposal to control active and reactive power of small wind turbines employing permanent magnet synchronous generator (PMSG) in distributed generation systems. A three-phase AC-DC-AC electric power converter is employed to process the energy generated by the PMSG. Direct power control is applied to generate the PWM signals at the DC-DC converter, which allows controlling the active power through an adaptive PI controller by means of a gain scheduling adaptation mechanism. A voltage source inverter (VSI) is utilized to connect the machine to the electrical grid following stability and low harmonic distortion requirements. In addition, VSI has the role of controlling the reactive power exchanged with the grid. Simulation results have shown that the proposed system is reliable, leading to good results for a small-scale wind turbine. Moreover, direct power control is a strong and low-cost alternative for maximum power point tracking application. The reactive power control, in turns, adds a suitable extra degree of freedom to the system, which can be used to reduce the impact of voltage fluctuations and short-circuit on the grid.