A PWM inverter for an induction motor often has a problem with a high frequency leakage current that flows through stray capacitors between stator windings and a motor frame to ground. This paper proposes a new type of Active Common Mode Voltage Canceler circuit for the reduction of common mode voltage and high frequency leakage current generated by the PWM VSI-fed induction motor drives. The compensating voltage applied by the common made voltage canceler has the same amplitude as, hut the opposite polarity to, the common mode voltage by PWM Inverter. Therefore, common mode voltage and high frequency leakage current can be canceled. The proposed circuit consists of four-level half-bridge inverter and common-mode transformer. Simulated and experimental results show that common mode voltage canceler makes significant contributions to reducing a high frequency leakage current.