This paper introduces a new single-phase multilevel inverter with HF isolation and bi-directional power flow capability. The advantage is to provide compact HF isolation, without an additional dc-stage and with lower harmonic distortion in the load. Typical applications of this converter are: photovoltaic systems, fuel cell systems and small wind power systems. The topology is based on a high-frequency push-pull inverter, a high-frequency transformer and an ac/acmultilevel converter. A detailed HF-link multilevel inverter description is presented. A modulation strategy and a commutation strategy for the ac/ac converter is proposed with the benefits of soft-switching commutations with no extra components. The multilevel topology permits a significant reduction of the output filter and an improvement of the efficiency