Abstract: This paper presents a study of a D-STATCOM (Distribution Static Compensator) used for load balancing and harmonic reduction. The basic idea of the voltage sag mitigation, using a D-STATCOM is to dynamically inject a current of desired amplitude, frequency and phase into the grid line. The proposed method uses the instantaneous reactive power theory for generating reference values of current that need to be injected into the point of connection D-STATCOM in order to compensate the voltage errors. The proposed method offers structural simplicity and less calculation complexity. Simulation results indicate that this method is effective and D-STATCOM has good performance to balance the load and mitigate harmonic components of current.