Advanced power module technology capable of taking advantage of the superior features of next-generation power devices, such as those fabricated with SiC and GaN, must be developed to create much more compact and costeffective power conversion systems. New power modules based on such technology are especially required to allow fast switching of power devices in the extended junction temperature range. This paper describes the major technical challenges involved in sufficiently improving the thermal stress reliability of the critical package systems in SiC power modules and in markedly reducing internal parasitic inductance. Thermal stress reliabilities of the die attachment system, wire bonding system, and encapsulant system are successfully improved, all of which are shown to be able to achieve common life targets: 1) 3000 h for a storage test at 250°C and 2) 3000 cycles for thermal cycling between −40°C and 250°C. A novel phase-leg power module capable of substantially reducing the loop inductance along the principal current tracks is proposed and fabricated by applying SiC-JFETs, SiC-Schottky barrier diodes, and the abovementioned reliable thermal stress package systems. Double pulse switching testing of the module reveals smaller drain-source voltage spikes and ringing even in turn-ON and turn-OFF transients at very high slew rates of current and voltage. Finally, a 0.34 L forced-air-cooled dc 600 V input ac 50 Hz 400 V 25 kW output three-phase SiC inverter is fabricated using three-phase leg modules and its operation is demonstrated at high-power levels.