This study proposes a dual three-leg voltage source inverter (VSI)-based distribution static compensator to compensate unbalanced and non-linear loads in three-phase four-wire distribution systems. The proposed topology uses two three-leg inverters having common dc link with single dc capacitor and an additional small rating ac capacitor connected from the negative terminal of VSI to the system neutral. The proposed scheme with associated control algorithm has capability to compensate unbalanced non-linear load and hence makes source current as balanced sinusoidal and at desired power factor. The control algorithm also ensures the proper sharing of reactive, harmonics and unbalanced powers between two VSIs and controls the grid current total harmonic distortion level even in the presence of unbalanced and distorted voltages. The performance of the proposed scheme has been verified using simulation and experimental studies under different voltage conditions and detailed results are presented.