Distribution static synchronous compensator (D-STATCOM) has been developed and attained a great interest to compensate the power quality disturbances of distribution systems. In this paper, a novel single-phase control scheme for D-STATCOM is proposed to improve voltage profile at the Point of Common Coupling (PCC). The proposed voltage mode (VM) controller is based on the phase space algorithm, which is able to rapidly detect and mitigate any voltage deviations from reference voltage including voltage sags and voltage swells. To investigate the efficiency and accuracy of the proposed compensator, a system is modeled using Matlab/Simulink. The simulation results approve the capability of the proposed VM controller to provide a regulated and disturbance-free voltage for the connected loads at the PCC.