Summary In this paper, a three‐phase, infinite level voltage source inverter (ILI) topology‐based DSTATCOM is put forth. The number of voltage levels of an ILI depends on the carrier frequency used. Its reduced harmonic content, high DC link utilization, and reduced THD outweigh other inverter topologies and switching techniques. In the proposed technique, a single high frequency switch alone is needed. The instantaneous reactive power theory is used for the compensation. The aim of this paper is to mitigate harmonics by a new circuit topology for inverter feeding current at the point of coupling which requires lesser dc voltage when compared with conventional bridge type inverter which requires more than 1.5 times the rms voltage of supply voltage as the dc link voltage. The converter models are implemented in the MATLAB/SIMULINK. The power quality performance of the ILI‐based DSTATCOM is analyzed, and its hardware model is developed.