A cascaded STATCOM used in industrial and distribution network is designed and studied in this paper, which using the phase shift carrier pulse width modulation strategy. Based on the cascaded H-bridge structure, a new STATCOM control strategy under the conditions of unbalanced loads and asymmetric system voltage is proposed. Through analyzing the effects of the cascaded STATCOM to the dc-side voltage under the conditions of unbalanced loads and asymmetric system voltage, a method is proposed which injecting an appropriate zero sequence voltage into the reference waveform, making active power exchange among the three-phase clusters, making the active current of every phase maintain the module's dc-voltage balance, at the same time tracking the compensation reference current. This control strategy can be used to both the unbalanced loads and the asymmetric system voltage, avoiding the over-current of negative sequence current and the clusters' dc-side voltage unbalance due. Simulation results proved the advantages and verified the validity of the proposed method.