Three phase four wire D-STATCOM system with HESS (D-STATCOM/HESS) is proposed to deal with the harmonic, reactive power, and load frequent fluctuation in distribution network to realize distribution network reactive power compensation and harmonic suppression and smooth load active power frequency fluctuation. Firstly, the traditional harmonic current detection method of ip- iq is improved to achieve an accurate detection of active and reactive power and harmonic compensation current on load. Secondly, due to the charge and discharge characteristics of lead-acid batteries and supercapacitors, coordination control method is employed to ensure distribution network energy compensated quickly and accurately. Finally, the three-phase four-wire D-STATCOM/HESS system and control algorithm are verified by the actual civil load distribution network circuit simulation. The system designed is shown effective in suppressing harmonics, reactive power compensation and smoothing fluctuations of the active power. This work is supported by Natural Science Foundation of Shanghai (No.15ZR1417600) and Engineering Research Center of Shanghai Science and ip- iq Technology Commission Program (No. 14DZ2251100).