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In order to overcome the often encountered trouble in setting the controller parameters by trial and error, an attempt has been made to design the proportional-plus-integral (PI) controllers for a variable-speed direct-drive permanent magnet synchronous generator-based grid-connected wind energy system (WES). The characteristic equations for various control loops in WES have been developed, and the most stable zones have been identified in the parametric plane by means of the D-partition technique and frequency scanning check. To ensure high degree of relative system stability and good damping ratio, the PI controller parameters have been selected by comparing the step responses of the control loop plotted for different sets of controller parameters chosen from the identified stable zone. A simulation model using MATLAB/Simulink and SimPowerSystems toolbox has been built to examine the performance of the WES incorporated with the designed values of the parameters of the PI controllers under fluctuating wind speed condition.