Flexible multi-state switch (FMSS) is defined as a power electronic converter connected two or more feeders in distribution network. It can compensate the harmonics, negative sequence and reactive power of varying frequency and size. It is an ideal compensation device. In this paper, the mathematical model of flexible multi-state switch under unbalanced nonlinear load condition is established. According to the control target of the system, a reference current detection method based on instantaneous reactive power theory is determined, and the output current of the converter is controlled by PI regulator. It compensates for harmful currents such as negative sequence and harmonic current in the load current to improve power quality. In this paper, a simulation model of three-port flexible multi-state switching system under unbalanced and non-linear load condition is built in Matlab/simulink environment. The research results show that the method used in this paper can effectively compensate the harmful currents such as harmonics and negative sequence of unbalanced systems, and shows good dynamic performance.