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A united system of thyristor switched capacitor (TSC) and static var generator (SVG) was proposed to improve voltage regulation, stability, and power factor in ac transmission and distribution systems. The TSC is consisted of multi-groups binary-coded capacitors, which is mainly used for large capacity var compensation step by step. SVG compensates small capacity reactive power continuously, and filters harmonics generated by the nonlinear load. When SVG compensates harmonics with traditional control method, it may run into oscillation if the SVG controller does not consider the interaction between TSC and SVG, so a selective harmonic compensation method is present to solve the problem. A predictive control algorithm for TSC is studied to have a correct compensation when the load changes rapidly. The proposed united compensation system can implement continuous reactive power and harmonic currents compensation cost-effectively. Simulation and experimental results demonstrate the validity of the proposed control algorithm.