The load side voltage disturbances can be effectively mitigated by connecting a dynamic voltage restorer (DVR), a series compensating device. A DVR is realised by a voltage source inverter with DC storage device and a series injection transformer. Rating and design issues of an injection transformer are of prime concern for the proper voltage compensation using DVR. Voltage underrating of the transformer may lead to its saturation, whereas, overrating increases the cost and size of the DVR. The voltage applied to the primary winding of the transformer is a combination of several components of different frequencies. Considering above aspects, rating and design issues are presented in this paper. A novel method is proposed to find the voltage rating of the transformer as a function of the fundamental frequency. Furthermore, the inrush current due to saturation is avoided during transient period. K factor method is used to account for the effects of current harmonics in the transformer. A PSCAD model is used to validate the efficacy of the proposed design methodology to find the voltage rating and overall performance of the DVR. A prototype injection transformer is constructed utilising the proposed design method and experimental studies are conducted to confirm the proposed method. © 2010 Inderscience Enterprises Ltd.