This paper proposes an improved control strategy for a three phase, four leg inverter used for the simultaneous supply of three phase and single phase AC loads in a transformerless hybrid power system (HPS) application. First, the mathematical model of the inverter is obtained by using the average technique, which allows converter systems to be rapidly and accurately simulated. Then, two control strategies are described. The first one uses the conventional dq0 frame rotating with the angular frequency omega (omega = 314 rad/s) and PI (proportional integral) controllers to ensure voltage and current regulation. The second one is an improved control strategy based on the decomposition of the supply three phase voltage and current into instantaneous positive, negative and homopolar sequence components using phasor representation. These three sequences are controlled independently in their own reference frames as DC signals. The positive sequence is regulated by the PI controllers in a positive reference frame, which rotates counterclockwise, while the negative sequence is regulated by the PI controllers in a negative reference frame, which rotates clockwise at the same angular frequency. Since the proposed strategy uses phasor representation, the actually superposed phasors of the homopolar sequence are spatially displaced at 120 degrees. Then, using a negative reference frame system, the obtained DC signals are regulated by the PI controllers. Simulation results show the validity of the innovative control strategy. (c) 2007 Elsevier Ltd. All rights reserved.