Active power filter (APF) and static synchronous compensator (STATCOM) are indispensable elements in power system. APF can be used to suppress the harmonics, while STATCOM can be used to compensate reactive power. In this paper, the functions of APF and STATCOM are combined in a single unit by controlling a three-phase cascaded H-bridge converter, i.e. APF-STATCOM. This paper introduces topology and working principle of cascaded H-bridge APF-STATCOM and puts forward a control strategy. In order to balance DC capacitor voltages of cascaded H-bridge converter, balancing control strategy for cascaded H bridge converters based on nearest voltage level modulation (NLM) is proposed. 36 cascaded H-bridge APF-STATCOM model is set up in PSCAD/EMTDC. And by the simulation, the feasibility and effectiveness of control strategy and balance control strategy are verified. The proposed capacitor voltage balancing strategy can avoid unnecessary frequent switch of H bridge module IGBT.