An improved switching strategy is proposed for a three-phase three-leg distribution static compensator. The scheme attains both constancy and reduction in switching frequencies for all the switches of the voltage source inverter. This is obtained by exploiting the potential of the uncontrollable (zero vector) states in the 3-leg inverter. The switching commands for one of the three inverter legs are given directly from a square pulse of a user-defined frequency. The other two legs are operated in hysteresis current tracking mode. The paper explains the working of the controller at a micro-level describing the possible switching transition sequences. This strategy allows the user to directly define the switching frequency of all the inverter switches. All these are achieved without sacrificing the advantages of the hysteresis controller. The proposed scheme is validated through extensive simulation results in a three-phase three-wire distribution system with non-linear unbalanced load. Its response is also studied for transient load conditions. ©2008 IEEE.