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The matrix converter is an array of controlled bi-directional semi-conductor switches that allows direct ac-ac conversion without an intermediate dc link. This converter has several attractive features that have been investigated in the last two decades. Multilevel converter technology has become increasingly popular in recent years due to high power quality, high-voltage capability, low switching losses and low EMI issues. This paper is concerned with applying multilevel techniques to direct ac-ac power converters and concentrates on developing the concepts of space vector modulation for a multilevel matrix converter. Results from a small-scale experimental prototype are presented to validate the theoretical findings.