A dynamic voltage restorer (DVR) is a power electronic controller that can protect sensitive loads from disturbances in the supply system. This device can tightly regulate the voltage at the load terminal against imbalance or harmonic in the source side. The behavior of the device is studied through steady-state analysis, and limits to achievable performance are found. This analysis is extended to the study of transient operation where the generation of the reference voltage of the DVR is discussed. Once the reference signals are generated, they are tracked using a switching band scheme. A suitable structure in which the DVR is realized by voltage source inverters is also discussed. Particular emphasis on the rating of this device is given. Extensive simulation results are included to illustrate the operating principles of a DVR.