A high-frequency AC-link, transformer-isolated three-phase inverter which is capable of bidirectional power flow is presented. Such an inverter could find widespread use in applications like interfacing alternate energy sources to the grid and UPS systems. A resonant LC circuit is used to achieve natural commutation of the leakage energy in the leakage inductance of the transformer. This natural commutation of the leakage energy eliminates the need for additional circuitry that would otherwise be needed to commutate the trapped energy. Additionally, the high-frequency AC link makes it possible to reduce the size of the transformer, resulting in a lower cost and a compact design. The AC link is utilized to achieve zero-voltage switching in the output cycloconverter. A three-phase, 5-kW inverter is simulated in the SIMULINK environment and the results are discussed.