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A three-phase capacitor-clamped converter for use in power factor correction and harmonics elimination is presented. There are two legs in the proposed converter on to achieve three-level pulse-width modulation (PWM) and on to constrain the line currents to be sinusoidal waves. Only eight power switches, instead of the 12 power switches used in a conventional three-phase flying capacitor converter, are used in the proposed converter. Three control loops (a DC link voltage control, a neutral-point voltage control and a line current control) are used in the control scheme to achieve DC bus voltage regulation, to balance the neutral-point voltage and to draw balanced sinusoidal line currents respectively. A mathematical model of the converter is derived and a control scheme is presented. The proposed circuit topology can be applied to AC motor drives and power quality compensation. Computer simulations and experiments are presented that verify the effectiveness of the proposed control scheme.