A Hybrid Multilevel H-bridge converter based transformerless static synchronous compensator employing an effective modulation control technique is Proposed.The main objective is to maintain the voltage stability by compensating the reactive power in the transmission system.A new control strategy is proposed in this paper for dc voltage regulation and also to isolate the voltage and current harmonics in the transmission system.This new STATCOM in each phase consist of series connection of a high-voltage H-bridge converter operating at fundamental frequency and a low-voltage H-bridge converter operating at 5 kHz.The fundamental parameters are controlled with the help of Fuzzy Logic controller.In order to effectively improve the immunity capability of this novel control strategy to the uncertainties in system parameters, two fuzzy PI controllers are separately employed to maintain the voltages at the PCC and to simultaneously regulate dc-link voltage. The hybrid multilevel STATCOM which can be used at the point of common coupling (PCC), for improving power quality is modelled and simulated using proposed control strategy.