The work presented in this paper concerned with the design and software implementation of STATCOM based on multilevel diode clamped converter. Two topologies of this type of converters have been considered and tested. The first topology was STATCOM based on three-level diode clamped converter, while the second one was STATCOM based on the five-level diode clamped converter. Phase Shift Pulse Width Modulation control strategy was employed for driving the STATCOM. The main task of the proposed work is to compensate a grid with semi-pure (low distorted) sinewave three-phase voltages. Simulation results illustrate that the STATCOM (for the two types) can control Q rated at 100 KVA from leading to lagging (or vice versa) within 31.5ms, maintaining capacitor voltages with an acceptable balance range