In order to lower the switching losses and reduce the harmonic content of the cascade SVG, the method of PAM+PWM is introduced. Four H bridges constitute the PAM unit, every H bridge works under the fundamental frequency, so the switching losses are low. One H bridge constitutes the PWM unit, the PWM unit can compensate the harmonic content of the output step waveform of the PAM unit, it can greatly reduce the voltage and current distortion factor and improve the power quality. The pulse cycle transposition is used on the DC side, it can effectively solve the problem of the DC capacitors voltage unbalance of the PAM unit. The PWM unit outputs the reactive current by the current direct control method, it can improve control accuracy and response speed of the device. The model of SVG with chain inverter is built in Matlab/Simulink, the result proves the validity of the method.