Abstract: To solve the power quality problems especially the neutral current overload problem in the three-phase four-wire low-voltage distribution network, a hybrid power quality compensator based on series-parallel structure is proposed. The parallel part of the system is composed of the three-phase three-leg converter while the series part mainly includes the single-phase H-bridge converter and the small-capacity series transformer. To reduce neutral current, the customized transformer parallel compensation is employed in the system. But it is usually inefficient and requires large capacity transformers. This paper presents a novel series compensator structure.Firstly, the mathematical model of the new series compensator is analyzed, the series transformer is equivalent to variable impedance connected in series with the neutral line and the compensation coefficient α is introduced to adjust the equivalent impedance and the current on the neutral line. Then, a comparison is made with customized transformer parallel compensation in terms of capacity and effect. Finally, the correctness of proposed strategy is verified by simulation results.