This paper presents a strategy for controlling a STATCOM to act as an instantaneous reactive current source. The STATCOM, consisting of a three phase inverter along with a capacitive filter for the dc bus and inductive line-side filters, is modeled with the overall objective of using it for load voltage regulation. Fast control of the reactive current is achieved using direct feedback linearization with respect to one control input. The other control input is used to indirectly regulate the dc bus capacitor voltage via regulation of the real current to a quasi-steady state value. Asymptotic stability of the system is rigorously established and a region of convergence is computed as a by-product of the stability analysis. Simulation results of the controlled STATCOM integrated with a distribution system model and a load voltage controller show the efficacy of the control strategy.