A new method of current balance compensation based on SVG and V/v transformer is proposed to solve the problem of three-phase side current asymmetry caused by traction power supply system of electrified railway. The conditions for elimination of negative sequence current are analyzed. In this compensation system, a total of three single-phase voltage source inverters of SVG are respectively connected to a, b and ab side of the V/v transformer. In this method, the structure and compensation principle of this compensation system are introduced, and the negative sequence current compensating reference detecting method for V/v transformer is proposed. To compensate negative sequence current and maintain the DC voltage, the direct current control and the DC voltage control of SVG is presented. The proposed topology is simulated on the MATLAB/Simulink simulation platform to verify the correctness and effectiveness of this compensation method.