Multilevel inverters (MLIs) have made great strides in utilizing renewable energy and industrial applications compared to conventional two‐level inverters in terms of output voltage quality, smaller size of the output filter, and higher efficiency. This paper describes a new diode containing bidirectional topology for single‐phase MLI. This structure is presented to reduce the count of switches, isolated voltage sources, and drivers that can increase the number of output levels modularly. This converter, despite the use of diodes, can feed bidirectionally the low power factor inductive–resistive loads. The proposed structure has been designed to achieve a higher output voltage levels relative to the number of switches, drivers, and direct current (DC) voltage sources. Three different algorithms have been proposed to determine the values of DC voltage sources. To confirm the superiority of the proposed structure, a detailed comparison has been carried out with other MLI topologies. Then the proposed topology is simulated in Matlab/Simulink environment using the nearest level modulation technique. Finally, experimental results are presented to confirm the performance of the designed structure in symmetric and asymmetric topologies.