The possible operating states of an impedance network of a Z-source inverter are identified and analyzed with the objective of deriving design guidelines. Through the analysis it is shown that in addition to the desired three dynamic states, the operating cycle can contain another three static states that do not contribute to the power conversion process. These three static states can be avoided by selecting suitably large capacitors and inductors. By using the equations derived in the analysis of steady states, the paper presents guidelines to design the impedance network accurately for the case where the inverter is operated only in active and shoot-through states. Furthermore, a much simpler method is also presented to design the impedance network for the cases where the waveforms can be assumed to be linear. Computer simulations are used to verify the design process and to demonstrate the appearance of undesired states when sufficiently large capacitors and inductors are not selected