This paper presents an inverter-less static synchronous compensation (IL-STATCOM) based on three-level AC-AC converter for reactive power and harmonic compensation. Compared with traditional STATCOMs, this device is more cost-effective and reliable because it does not need large-volume electrolytic capacitors as energy storage devices. The compensation principle of the three-level AC-AC converter based on even harmonic modulation (EHM) technique is analyzed. Fourier transform is applied to study the relationship between the injected compensation current and EHM terms. The coupling problem is discovered through the analysis. Then a decoupling control strategy, which uses the method of non-adjacent even modulation and is applicable for three-phase three-wire system, is proposed to solve the coupling problem. Finally, the three-phase three-wire system structure is proposed and the closed-loop control architecture based on successive harmonic compensation strategy (SHCS) is designed. The simulation and experimental results verify the effectiveness of the IL-STATCOM for reactive power and harmonic compensation.