To achieve better control of STATCOM based on the Neutral Point Clamped (NPC) three-level inverter, working principles and characteristics of STATCOM are analyzed. A control method based on active-reactive current decoupling combined with space vector modulation (SVPWM) is proposed. In this method, current of active and reactive power are decoupled, achieving accurate and fast tracking of reactive current; The SVPWM modulation algorithm may lower the switching frequency, whitch is easy to be applied in a digital system. Experimental results shows that the proposed method can control the STATCOM effectively, the control system has good static and dynamic characteristics.