Voltage sags are major power quality problems in distribution systems. To overcome these problems, different solutions have been proposed to compensate these sags and protect sensitive loads. As a solution, Dynamic Voltage Restorers (DVRs) have been proposed to provide higher power quality. However, the quality of DVR output voltage, such as THD, is important. So, in this paper a configuration of DVR based on stacked multicell (SM) converter is proposed. The main properties of SM converter, which causes increase in the number of output voltage levels, are transformer-less operation and natural self-balancing of flying capacitors voltages. The proposed DVR consists of a set of series converter and shunt rectifier connected back-to-back. To guarantee the proper operation of shunt rectifier and maintaining the dc link voltage at the desired value, which results in suitable performance of DVR, the DVR is characterized by installing the series converter on the source-side and the shunt rectifier on the load-side. Also, the pre-sag compensation strategy and proposed synchronous reference frame (SRF) based voltage sag detection and reference series injected voltage determination methods are adopted as the control system. The proposed DVR is simulated using PSCAD/EMTDC software and simulation results are presented to validate its effectiveness.