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To increase the fault tolerance for cascaded H-bridge multilevel inverters, a novel control algorithm is proposed for the inverter operating under faulty conditions. The influence of various faults on space vectors is investigated and the maximum achievable output voltage of the inverter with faulty power cells is derived. Making use of the redundant switching states, the proposed algorithm is able to produce a three-phase balanced line-to-line voltage with minimum harmonic distortion for the inverter with disabled power cells. In addition, the control algorithm is suitable for use in the cascaded H-bridge inverters of any voltage levels. Simulation and experimental results are provided for verification.