This paper proposes a new half-bridge inverter based active power quality compensator (APQC) for electrified railways with a three-leg inverter. The first-leg is connected to α-phase, and the second-leg is connected to β-phase. The midpoint of two capacitors on the dc side is connected to the ground line. These two half-bridge inverters exchange the active power on the each feeder each other through two dc capacitors, and compensate the negative-sequence and harmonic components of the load currents. The third-leg performs a dc voltage balancer for two dc capacitors connected to the half-bridge inverters. Thus the balanced and sinusoidal source voltages and currents factor are attained on the primary side of the Scott transformer with the balanced dc capacitor voltages. The basic principle of the proposed half-bridge inverter based APQC is discussed in detail, and then confirmed by digital computer simulation using PSIM software. Simulation results demonstrate that the balanced source currents with the unity power factor are obtained on the primary side the Scott transformer in the traction substation systems balancing two dc capacitor voltages.