This paper mainly studies the main circuit topology, the working principle, modulation technique and control strategy of the STATCOM based on H-bridge. The STATCOM direct power control algorithm based on the virtual flux is used to control the AC side reactive power compensation, and in accordance with the principle of conservation of power, the DC side voltage imbalance factors are analyzed, and a distributed DC voltage control algorithm is also introduced. According to the principles of the STATCOM based on H-bridge, a simulation model is build in MATLAB to analysis the theory of the control algorithm. The results show the control algorithm is correct. Finally, the control strategy is verified in a three level chain STATCOM system with VME control box as its core controller, and the experimental results show that the algorithm is feasible.