This paper presents a novel three-phase ac/ac power converter topology with a high frequency ac-link for adjustable speed PWM ac drives. Such drives find applications in electric power generation from renewable energy sources like wind. This converter has a single power conversion stage with bidirectional power flow capability. The high frequency transformer provides voltage transformation, isolation, noise decoupling and high power density. This topology minimizes the number of switching transitions of the load with the transformer windings. This reduces the common-mode voltage switching and results in a better output voltage profile. This paper presents a lossless source based commutation of leakage energy. It also results in the soft switching of all the switches in the load side converter. The proposed topology is controlled with a carrier based PWM technique based on the direct modulation of matrix converters. This modulation results in controllable input power factor. The proposed converter has been analyzed and simulated. The simulation results confirm the operation and the advantages of the proposed topology.