-This paper presents a novel method of realizing one of the custom power controllers, the distribution static synchronous compensator (D-STATCOM) using current source converter (CSC) topology. Almost all the custom power controllers such as dynamic voltage restorer (DVR), unified power quality conditioner (UPQC) including D-STATCOM are generally designed and implemented by using voltage source converters (VSC) and not much research publications with CSC based approach has been reported over the last one decade. Since the D-STATCOM is a current injection device, its performance can be improved when realized by a current-source converter which can generate a controllable current directly at its output terminals and offers many advantageous features. In this paper, an attempt has been made to study the performance of a CSC based D-STATCOM suitable for use in the power distribution system in order to mitigate voltage sag and improve power quality. The proposed model uses a three leg CSC whose switching strategy is based on sinusoidal pulse width modulation (SPWM). The model has been simulated in the Matlab/Simulink environment. The results of the simulation runs under steady state and dynamic load perturbation provide excellent voltage and current waveforms that support the justification of the proposed model.