The paper presents a new digital-controlled single-phase transformer-based inverter for non-linear load applications. A capacitive full-bridge circuit is added to provide instant current under non-linear load condition and thereby reducing the harmonics significantly to meet the required harmonic standard, IEEE 519-1992, even under non-linear load condition. The redundant capacity, cost, size and weight of line frequency transformer can therefore be dramatically reduced. Moreover, a new integrated controller for inverter control is proposed to eliminate both DC current component and steady state error even under heavy load condition. The proposed integrated controller consists of a Proportional (P) controller acts as voltage controller, DC offset canceller, an RMS compensator and non-linear load compensator.