Aimed at the common-mode voltage produced by PWM inverter in motor drive system, the reduction method of three-level PWM inverter output common-mode voltage is investigated. This paper gave the basic principle of three-level inverter, and according to the relation between switch state and the corresponding space vector, then came to a conclusion that common-mode voltage can be reduced by using improved reference vector composes with zero voltage vector and medium voltage vector. At the same time, an improvement space vector modulation program is proposed to reduce the common-mode voltage. The program is simulated by PS IM platform, the simulation results conform to the theory analysis.