This paper presents direct torque control (DTC) methodology for a four-switch three-phase (FSTP) inverter-fed permanent magnet brushless ac (PM BLAC) machine, with reference to a conventional six-switch three-phase (SSTP) inverter. It has been found that when derived from conventional voltage model flux estimation scheme, the predicted stator flux imbalance may be caused by unbalanced inverter voltage drop in the FSTP inverter, in which one phase winding is directly connected to dc-link midpoint. While this imbalanced problem does not adversely affect the performance of current-model-based DTC, it causes significantly nonsinusoidal current waveforms and considerably unbalanced current magnitudes in voltage-model-based DTC. A new compensation scheme taking into account the different forward voltage-drop values in the switching device and the freewheeling diode is proposed for the voltage-model-based DTC to correct for stator flux imbalance via the addition of corrective voltages to flux equations. The proposed scheme has significantly improved the shape of current waveforms with satisfactory balanced magnitudes, total harmonic distortion, and torque ripple factor, as verified by both simulation and experimental results. It has been shown that it is possible for an FSTP inverter to provide similar performance to an SSTP inverter when driving a PM BLAC machine.