In order to improve the robustness and dynamic response of distribution static synchronous compensator (DSTATCOM) control system, the common sliding mode control strategy is proposed based on the time-domain analysis of DSTATCOM nonlinear mathematical model. A novel sliding mode control strategy is proposed to further reduce chattering. Sliding surface is separated into two different sliding surface according to deviation extent which has different sliding mode strategy, so the current tracking speed is improved and chattering is reduced. Hardware and software of DSTATCOM are designed, and a prototype based on DSP is implemented. The proposed control strategy possesses the advantages such as strong robusticity, good dynamic response and low chattering, which show its validity and feasibility.