Several pulsewidth modulation (PWM) strategies have been proposed for the three-level three-phase diode-clamped dc–ac converter. Among them, the nearest-three virtual-space-vector PWM guarantees the dc-link capacitor voltage balance under any operating condition, provided that the addition of the three phase currents equals zero. This paper extends this modulation concept to the four level converter. The new virtual vectors are presented and a simple modulation solution is defined. Conventional nearest-three space vector PWM cannot comprehensively achieve balanced and stable dc-link voltages. The proposed modulation solution enables the practical use of the four-level converter since it guarantees the dc-link capacitor voltage balance for any operating condition and load, provided that the addition of the three phase currents equals zero. Simulation and experimental results prove the goodness of the presented approach.