Along with the applications of distributed resources (DR), nonlinear power electronic devices and nonlinear and unbalanced loads, some deteriorative influences have been caused such as poor power quality and stability issues. The Static Synchronous compensator (STATCOM), as one of newest reactive power compensations with the best performances, plays an important role in the power system up to now. This paper deals with the fundamental compensation principle, the main circuit, current detection method, control strategy and application prospect of STATCOM which can reduce the line loss of power grid and the power loss of asynchronous motor.