A system and method for controlling a digital pulse-width modulated power converter achieves a fast large-signal transient response while maintaining a slow response near the steady-state operating point in order to assure stability and to reduce the system's susceptibility to noise. Digital output error samples are processed through a gain scheduling block that applies a non-linear gain function to produce a weak loop response when the system is near its steady-state equilibrium point and a strong loop response when large transients are encountered. The resulting system maintains a fast transient response to large error signals while reducing noise and loop jittering and assuring loop stability.