The solar cells should be operated at the maximum power point because its output characteristics are greatly fluctuated on the variation of insolation, temperature and load. Photovoltaic system needs an inverter which can interface the dc output power of solar cell with the residential ac load. The inverter has to supply a sinusoidal current and voltage to the load and the utility line with a high power factor. This paper proposes an utility interactive photovoltaic system designed with a step-up chopper and a PWM voltage source inverter. The step-up chopper operates in continuous mode by adjusting the duty ratio so that the photovoltaic system tracks the maximum power points of solar cell without any influence on the variation of insolation and temperature. The voltage source inverter operates in a manner that its output voltage is in phase with the utility voltage. The inverter supplies an ac power with high factor and low level of harmonics to the load and the utility power system.