SUMMARYFrom the global environmental viewpoint, distributed power systems using renewable energy source, such as solar power, wind power, and water power, are attracting much attention. Photovoltaic (PV) systems using solar power have few resource constraints and can be installed easily on the roofs of houses. Therefore, PV systems have been and will be introduced widely. However, when many PV systems are installed in consumers, differences in installed PV capacity may cause load unbalances. In such a case, the difference in the line currents flowing along medium‐ and high‐voltage lines can be increased and three‐phase voltage unbalances may appear due to the line impedance. In this paper, a distribution transformer using a three‐phase to single‐phase matrix converter with an ac inductor is proposed to suppress three‐phase voltage unbalances. The ac inductor is used for compensation of single‐phase power pulsations under any load conditions and in either direction of power flow. The proposed method was verified by a simulation with MATLAB/Simulink. In this simulation, resistive loads and reactive loads were assumed as the loads in the low‐voltage line. Reverse power flow from PV systems is represented by a current source with a power factor of 1.0. The control strategy and simulation results are presented in this paper.