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AC current regulation for low-pulse-ratio inverters is particularly challenging because the controller bandwidth is often comparable to the target fundamental frequency and this constrains the transient response. This paper presents an improved current regulation strategy to address this issue, using state feedback concepts to deterministically compensate for pulsewidth modulation (PWM) transport delay so that the controller gains can be significantly increased. Controller design principles are presented using discrete linear-quadratic-regulator theory, and an elegant strategy is applied to make the system more robust to PWM saturation. Experimental results for both 50-Hz and 400-Hz systems confirm the theoretical concepts and demonstrate the superior transient performance of the proposed strategy.