In AC motor VSD area, Traditional cascade multi-level inverter is widely used, but this type of converter could not realize the energy regeneration, so used in limited area. Through integrating PWM rectifier into traditional H-bridge inverter, the cascade inverter could realize energy regeneration. But PWM rectifier module need filter inductance, this will increase the converter’s space and cost, so it is also not widely used in application. The inverter side of cascade converter module is H bridge inverter, so the ripple of DC bus voltage is very large, this will also increase the converter’s space and cost, This paper proposed a method of using transformer’s leakage inductancce instead of filter inductance, This method can reduce system’s space and cost. This paper also proposed a new method to reduced DC bus voltage ripple by controlling PWM rectifier, the DC bus capacitor and its cost can be reduced. The input current of PWM rectifier is deteriorated, but the three phase harmonic current can be canceled, so the harmonic current has no effect on transformer input current. The phase-shifted SPWM technology is used in the cascade inverter to reduce harmonious of input current. Analysis and simulation results indicated validity and feasibity.