Coupled Inductor (CI) design for a 3-phase voltage source converter (VSC) with three parallel-connected 2-level inverter bridges in each phase is described. The CIs are desired to average the output of the parallel-connected inverter legs to produce 4-level phase and 7-level PWM line voltages with PWM voltage step smaller than the dc-link voltage. In addition, the frequency of the PWM line voltage is 6 times greater than the switching frequency. The system is useful for lowing filter size, weight and cost in mobile applications such as aerospace and electric vehicles where light-weight magnetic filters are desirable. The system is also useful to reduce cable interaction and common mode to ground noise in motor drives and uninterrupted power supplies. The CI design procedure is compared with the design of inductors used for current ripple cancellation. The weight of the CIs is shown to be 1/6 ^th smaller in comparison. Sample magnetic design of a 3-limb CI with metglas cores are presented for a 5.5 kW (300Vdc, 208V/15A) laboratory prototype operating with 60 Hz and 1.1 kHz fundamental voltages.