When using a microphone, proper placement is paramount. Different guitars have different "sweet spots." Take the time to find the perfect microphone position for your guitar. Avoid aiming the microphone directly over the sound hole, as this can make the guitar sound too bassy. Instead, aim the microphone over the 12th or 14th fret. Alternatively, aim it towards the guitar's body, below the fretboard. Place the microphone close to the guitar to reproduce an authentic sound, but not so close that it creates feedback or unwanted sound.
Condenser microphones pick up a wide range of frequencies, including an acoustic guitar's important high frequencies. These are typically used in studios but can also be suitable for performances in small or intimate venues. However, if you play in a louder band, a dynamic microphone may be more suitable. Dynamic microphones have a comparatively narrow frequency response but can be used to better control acoustic guitars in a louder band.
Acoustic guitar pickups can be fitted to your sound hole, and potentially give you better control over your guitar's sound. Active pickups (those with internal power sources) usually include volume and EQ knobs to help control your guitar's output. Passive pickups rely on external power sources and are best used with preamps or amplifiers with volume and EQ controls. Using a guitar pickup instead of a microphone can help reduce sound issues such as feedback.
Many acoustic guitars have internal electronics used to amplify the guitar's sound. Use the volume and EQ controls on your acoustic-electric guitar to find a good guitar tone. Using a preamp or amplifier with more intelligent EQ options can also help reduce feedback problems. If your guitar still has feedback issues, try fitting it with a sound hole cover, which helps reduce feedback. Acoustic-electric guitars may sound best through a microphone or pickup, instead of through its internal electronics. Experiment with these options.
Take time with your soundcheck, to ensure that you are happy with your guitar's tone and equalization. If there is feedback or an unwanted frequency, use an equalizer to cut that particular frequency. Make sure that your guitar is loud enough to be heard over the other instruments in your band, but not overly loud and not relying on high or harsh frequencies to be heard through the mix.