Transformers with on-load tap changer and step voltage regulators are most often used for regulating the distribution network voltage. Their use, however, creates certain problems, namely, the voltage control is in discrete steps and the response time is not satisfactory enough. In addition, the power factor (p.f.) compensation relies on capacitors installed by electricity users which creates additional problems manifesting themselves in unexpected overvoltages during light load and increase of power losses. To solve these problems, the authors have proposed a new voltage and p.f. control system for distribution networks based on sophisticated power electronics technology. This paper describes our study on the operating theory of inverter-controlled regulators and thyristor-controlled reactors, which play important roles in this system, and the results of simulation through which the usefulness of these equipment has been ascertained. © 1999 Scripta Technica, Electr Eng Jpn, 130(1): 76–87, 2000