A neutral-point-clamped three-level inverter with small dc-link capacitors is presented in this paper. The inverter requires zero average neutral-point current for stable neutral–point voltage. The small dc-link capacitors may not maintain capacitor voltage balance, even with zero neutral-point current. This may happen due to nonlinearities present in the circuit. This requires a fast control of the neutral-point voltage. A simple carrier-based modulation strategy which allows modeling of the neutral-point voltage dynamics as a continuous function of power drawn fromthe inverter is proposed. This continuous model shows that the neutral-point current is proportional to the power drawn from the inverter, and it enables the use of a well-established classical control theory for the neutral-point voltage controller design. A simple proportional integral controller is designed for the neutral-point voltage control on the basis of the continuous model. The design method for optimum performance is discussed. The implementation of the proposed modulation strategy and the controller is very simple. The controller is implemented in a 7.5-kW induction machine-based drive with only 14 μF dc-link capacitors. Also, the experimental results show that fast and stable performance of the neutral-point voltage controller are achieved and thus verify the validity of the proposed control approach.