This study presents a hybrid compensator based on distribution static synchronous compensator (DSTATCOM) and thyristor switched capacitor (TSC), which is intended to continuously compensate reactive power with higher quality and lower cost. The proposed coordination control strategies, in essence, are to continuously assign the reactive power between the DSTATCOM and the TSC. Usually, the fast response characteristic of the DSTATCOM will be lost for that the output of the DSTATCOM is limited by the conventional coordination control strategy. In order to improve the transient performance of hybrid compensator, the fast voltage control strategy is proposed to fast respond to the demand, and reactive power reserve control strategy is proposed to restore the capacity. The operation principle, control algorithm, and design procedure of a prototype are described. Laboratory tests and field tests have validated that the performance of the compensator is satisfactory, and the cost reduction of hybrid compensator is significant.