A high frequency ac link, transformer isolated three phase inverter capable of bidirectional power flow is presented in this paper. Such an inverter finds widespread use in applications like interfacing alternate energy sources to the grid, UPS systems. A resonant LC circuit is used to achieve natural commutation of leakage energy in the leakage inductance of the transformer. This natural commutation of leakage energy eliminates the need for additional circuitry otherwise needed to commutate the trapped energy. Additionally, the high frequency ac link makes it possible to reduce the size of the transformer resulting in a lower cost and a compact design. The ac link is utilized to achieve zero voltage switching in the output cycloconverter. A 3 phase, 5kW inverter is simulated in the SIMULINK environment and the results are discussed.