This paper presents a distributed generation interface based on cascaded multilevel inverter topology for medium voltage distribution networks. The interface enables the elimination of the needed transformer for coupling to the medium voltage network, which reduces the losses, size and weight of the DG unit. Also, different PWM modulation techniques are compared for the cascaded MLI, the comparison is based on the THD of the output voltage taking into consideration the effect of the carrier frequency. A decoupled control system is presented with the ability to operate the DG with unity power factor, constant power factor, or constant voltage. The system performance is simulated using PSCAD/EMTDC. It is shown that the DG with the constant voltage operation mode can be employed to improve the power quality at the point of common coupling (PCC).