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The neutral point clamped (NPC) three-level inverter is widely used in highvoltage and high-power applications. However, neutral point voltage oscillation (NPVO) and common-mode voltage (CMV) problems exist in the NPC three-level inverter. In this paper, an improved virtual space vector modulation (VSVM) is proposed based on the reconstruction of a virtual small vector and a virtual medium vector. Compared with the traditional VSVM, an improved VSVM can effectively reduce the CMV. On this basis, a vector conversion method is proposed to further reduce the NPVO in the whole range. Simulation results verify the effectiveness and superiority of the improved VSVM.