This paper proposes a novel custom power controller named as generalized unified power quality conditioner (GUPQC) based on cascade multilevel converter (CMC) for power quality improvement of a distribution system by using both five-level and three-level CMC. In a multi-bus, three independent feeders distribution system, the load reactive power and current harmonics of one feeder are compensated by a five-level CMC as shunt compensator, while in the other two feeders the voltage harmonics, voltage sag/swell and interruptions are compensated by two three-level CMCs as series compensators. The simulation and compensation performance analysis are based on PSCAD/EMTDC. © 2012 IEEE.