A two-level four-leg inverter has been developed for the three-phase four-wire power quality compensators. When it is applied to medium and large capacity compensators, the voltage stress across each switch is so high that the corresponding dv/dt causes large electromagnetic interference. The multilevel voltage source inverter topologies are good substitutes, since they can reduce voltage stress and improves output harmonic contents. The existing three-level neutral point clamped (NPC) inverter in three-phase three-wire systems can be used in three-phase four-wire systems also, because the split dc capacitors provide a neutral connection. This paper presents a comparison study between the three-level four-leg NPC inverter and the three-level NPC inverter. A fast and generalized applicable three-dimensional space vector modulation (3DSVM) is proposed for controlling a three-level NPC inverter in a three-phase four-wire system. The zero-sequence component of each vector is considered in order to implement the neutral current compensation. Both simulation and experimental results are given to show the effectiveness of the proposed 3DSVM control strategy. Comparisons between the 3DSVM and the 3-D hysteresis control strategy are also achieved. © 2006 IEEE.