Abstract: An implementation of a three phase distribution static compensator (DSTATCOM) using a control algorithm for its functions under nonlinear loads such as load balancing and reactive power compensation for power factor, and zero voltage regulation. A control algorithm is used for the extraction of the fundamental weighted value of active and reactive power components. Using digital signal processor the DSTATCOM is developed and its performance of DSTATCOM is found to be satisfactory for various types of loads.