This paper presents a single-stage bidirectional high-frequency transformer (HFT) link dc/ac converter topology for a three-phase adjustable magnitude and frequency PWM ac drive. This type of converters find a wide range of applications including UPS systems, drives involving renewable energy sources (Solar, Fuel cell), and energy storage systems (typically low voltage dc to high voltage PWM ac). The HFT results in reduction in cost and weight along with a considerable increase in power density. The adverse effects of common-mode voltage are well known in this kind of applications. The proposed topology along with a modulation technique reduces common-mode voltage to practically zero and generates high-quality output voltage waveform comparable to conventional space vector PWM (CSVPWM). A source-based commutation method, presented in this paper, to commute the energy stored in the leakage inductance of the HFT resulting in the following advantages 1) no need for any auxiliary circuits with passive components; 2) almost complete recovery of the leakage energy; 3) soft switching of the output side converter for all load conditions; and 4) minimization of common-mode voltage switching due to commutation. The converter along with the suggested control has been analyzed in detail. The presented simulation and experimental results confirm the operation of the proposed converter.