A phase shift algorithm based on the closed-loop control of dc-link voltage implemented on a series active voltage quality regulator (AVQR) is proposed in this paper. To avoid pumping-up the dc-link voltage, a general phase shift compensation strategy is applied. The relationships among the operation variables are discussed in detail, which is very important for guiding the design of both the main circuit and the control system. Then on the basis of an investigation of the dc-link voltage pumping-up from viewpoint of the active power flow, a novel phase shift control method based on the closed-loop of the dc-link voltage is proposed. This method can adjust the phase of the output voltage gradually and automatically according to the dc-link voltage variation without introducing a phase jump. The effectiveness of the proposed strategy is verified through simulations of a single-phase 5kVA prototype and laboratory experiments on both a single-phase 5kVA and a three-phase 15kVA prototype.