Use of multilevel inverters has become popular in recent years for high-power applications. Various topologies and modulation strategies have been investigated for utility and drive applications in the literature. Trends in power semiconductor technology indicate a tradeoff in the selection of power devices in terms of switching frequency and voltage-sustaining capability, New power converter topologies permit modular realization of multilevel inverters using a hybrid approach involving integrated gate commutated thyristors (IGCT's) and insulated gate bipolar transistors (IGBT's) operating in synergism, This paper is devoted to the investigation of a hybrid multilevel power conversion system typically suitable for high-performance high-power applications. This system, designed for a 4.16-kV greater than or equal to 100-hp load is comprised of a hybrid seven-level inverter, a diode bridge rectifier, and an IGBT rectifier per phase. The IGBT rectifier is used on the utility side as a real power flow regulator to the low-voltage converter and as a harmonic compensator for the high-voltage converter, The hybrid seven-level inverter on the load side consists of a high-voltage slow-switching IGCT inverter and a low-voltage fast-switching IGBT inverter, By employing different devices under different operating conditions, it is shown that one can optimize the power conversion capability of the entire system. A detailed analysis of a novel hybrid modulation technique for the inverter, which incorporates stepped synthesis in conjunction with variable pulsewidth of the consecutive steps is included. In addition, performance of a multilevel current-regulated delta modulator as applied to the single-phase full-bridge IGBT rectifier is discussed. Detailed computer simulations accompanied with experimental verification are presented in the paper.