A model reference adaptive control scheme is developed based on hyper-stability theory and is proved. Both of reduced order models of the power system and relevant oscillation frequencies are acquired by TLS-ESPRIT algorithm. The band-pass filters (Butterworth) are utilized to decompose oscillation frequencies into different channels and controllers are designed for each oscillation mode based on adaptive control method, thus reducing the influences of the various controllers. Xiangjiaba-Shanghai DC link under island operation condition is simulated using electromagnetic transient program PSCAD/EMTDC to demonstrate proposed control strategy. The results validate that the proposed method is able to suppress low-frequency oscillation and sub-synchronous oscillation simultaneously and the proposed method has better control performance than the traditional PID control. The problem will lead to controller performance deterioration caused signal transmission delay in system and it is resolved by phase compensation.