A novel passive lossless snubber circuit for multilevel inverters is proposed in the paper. The topology of it is simple and requires no extra control. In order to reduce the high voltage stress on power switches of multilevel inverters with the proposed snubber circuit, an improved snubber circuit is presented by adding separate low-power DC sources into the original snubber. The operation principles and design considerations are described in detail in the paper. A prototype of three-phase three-level diode clamp inverter with the improved passive lossless snubber is built and tested. The simulation and experimentation indicate that not only can it realize soft switching operation of the three-level inverter with low voltage stress but also the topology is simple.