Due to the global warming and increasing of green house gas emissions, the renewable distributed energy resources (DERs) are going to be integrated into the smart grid. As the grid can spread the intelligent energy management system to the long-distance remote areas, thus it requires a real-time dynamic state estimation and stabilization algorithm for monitoring and maintaining stability of these intermittent DERs. This paper proposes a belief propagation algorithm and H-infinity controller for system state estimation and stabilization using the internet of things (IoT) communication network. Basically, the IoT based smart sensors are deployed to gather the measurement information where the binary phase shift-keying are used for modulation. The system state and it error covariance are propagated between root and leave nodes of the considered Baysian tree network. Using forward and backward propagation of the these variables, an accurate state estimation is obtained. Using Parseval's theorem, bounded real lemma and Schur's complement, the discrete-time H-infinity controller is designed. The numerical simulation results demonstrates that the algorithms can effectively estimate and stabilize the microgrid states.