When in grid-connected mode of operation, distributed generators (DGs) within the microgrid (MG) can coordinate to act as a single entity to provide services to the bulk grid. The DGs can coordinate their power production to minimize the total operating cost, which is known as the distributed economic dispatch. Various methods have been proposed to solve the MG economic dispatch problem (EDP) in a distributed fashion, under the assumption that DGs’ power output, in aggregate, follows a constant or slowly varying power command. However, when the MG is providing frequency regulation service, or the internal load is highly dynamic, the MG EDP becomes dynamic, and the state-of-the-art distributed approaches cannot guarantee optimality. In this paper, we propose a distributed economic dispatch algorithm for MGs providing frequency regulation service, as an example of a dispatch profile with ramp commands. A consensus protocol guaranteeing zero steady-state error for ramp inputs is integrated into the EDP to find the optimal solution in a distributed way. With the proposed algorithm, the MG is able to tightly follow a time-varying regulation signal while maintaining an optimal economic dispatch for all the DGs within. We validate the proposed method using regulation signals from PJM and demonstrate the algorithm on a hardware-in-the-loop testbed.