This paper proposes a Harmonic Reduction with Transformer Connected 3-Phase Multilevel Inverter arrangement employing a series connected transformer to suppress 7th, 11th &13th order harmonics (generated by non-linear loads).In the proposed scheme sinusoidal PWM signal generation technique is used for three phase multilevel VSI in conjunction with series connected transformer .The proposed model eliminates the need of output filter inductor. With this control strategy harmonic components of output voltage and switching losses can be minimized considerably. A simulation result verifies the proposed concept and indicates that the transformer is capable of reducing the harmonics in the line.