In this study, three-phase two-leg grid-connected neutral point clamped (NPC) inverter with LCL filter is proposed for distributed generation systems. Since the proposed inverter has only two legs, only two of the three-phase currents are controlled. Once the control of two currents is achieved, the control of third current is achieved automatically. The control objective is achieved by using sliding mode controller (SMC). Unlike the existing methods, the sliding surface function involves the inverter current and capacitor voltage errors. Hence, the reference signals of the inverter currents and capacitor voltages are essential in the SMC. In this study, these reference signals are generated by cascaded connected proportional resonant ( PR) controllers without making use of filter parameters and derivative operations. The proposed control algorithm is validated with MATLAB/Simulink simulations. Simulation results show that the proposed three-level two-leg NPC inverter injects sinusoidal and balanced currents to the grid. In addition, the designed controller provides fast transient response.