This paper presents a novel approach for precise and fast AC voltage regulation. The proposed method integrates switching of transformer taps and AC PWM control to achieve smooth voltage control. This paper presents the results of computer simulations and mathematical analysis made with the proposed voltage regulation concept implemented in a typical distribution system. The electro magnetic transient program (EMTP) was used for computer simulations. This paper demonstrates that the circuit has a good voltage control range and a response time, typically a half cycle. Harmonic analysis of the system bus voltage has shown that the total harmonic distortion produced by the PWM action is small and acceptable. The integrated PWM and transformer tap switching regulator can be implemented with forced commutated switches. A conceptual implementation of the control strategy has also been presented.