Leakage current reduction is one of the important issues for transformerless PV systems. Many interesting solutions have been reported to reduce the leakage current for three-phase PV inverters. However, most of them are limited to two-level inverters. Moreover, there is a potential risk of the over-current phenomenon. In order to solve the problem, a Z-source three-level four-leg inverter with a new modulation strategy is proposed in this paper. Firstly, the mathematical modeling of the three-level four-leg Z-source inverter for leakage current reduction is established for the first time. Secondly, a new carrier-based modulation strategy is proposed by utilizing the effective large, medium, small, and zero vectors, instead of the invalid vectors, to achieve the constant common mode voltage, as well as the leakage current suppression. Finally, the proposed solution is carried out on the TI (Texas Instruments) TMS320F28335 DSP + Xilinx XC3400 FPGA digital control hardware platform. The experimental results verify the effectiveness of the proposed solution.