Abstract: Conventional three-phase dq proportional current limiting cannot constrain individual phase currents under asymmetrical faults, while per-phase virtual-impedance limiting regulates fault current only indirectly. To address these limitations, a phase-wise current-limiting strategy based on single-phase dq transformation is proposed for VSG-controlled grid-forming inverters. Using the VSG angle as a common projection reference, the strategy extracts each phase’s fundamental voltage and inverter-side current components, enabling independent generation and direct limitation of phase current references. A 15-kW model compares the proposed strategy with a VSG controller without current limiting and the two conventional limiters under four fault conditions. Under an AB fault, the proposed strategy limits the steady-state peak current to 70.5 A, compared with 76.5 A and 76.4 A for the two conventional limiters. The post-fault steady-state active-power standard deviation is 0.025 kW, lower than their respective values of 0.226 kW and 0.253 kW. These results indicate improved phase-wise current limiting under asymmetrical faults and reduced post-fault steady-state active-power fluctuations.