The existing Z-source or qZ-source PWM AC-AC converters have limited voltage gain because of the equivalent series resistance in the Z-source inductor. In order to obtain higher voltage gain than (q)Z-source AC-AC converters, a coupled inductor(or transformer) based Z-source AC-AC converter is proposed in this paper. By increasing turns ratio of the coupled inductor more than 1, the proposed converter can obtain higher output voltage than (q)Z-source converters with the same duty ratio. A 120 W prototype AC-AC converter is built and tested to verify performances of the proposed converter.