This paper presents a new concept for a voltage transient sag compensator and the experimental result of its 400-V-class compensator. This compensator is composed of the series connection of some inverter units with gradational output voltages. Because each output voltage is different by 2n times, an approximate sinusoidal voltage is generated by controlling operation of each inverter and compensates voltage sag of the power line. The compensator can be directly installed in a power line without an insertion transformer and a large filter, and thus it is expected to be a compact and economical system. © 2005 Wiley Periodicals, Inc. Electr Eng Jpn, 154(3): 65–72, 2006; Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/eej.20289