The present invention provides a three-level ac generating circuit and the control method thereof. The three-level ac generating circuit includes a three-level boosting circuit connected to an input source and including a positive boosting portion and a negative boosting portion; and a three-level inverting circuit connected to the three-level boosting circuit and including a positive inverting portion and a negative inverting portion, wherein while the input source is a relative low voltage, the relatively low voltage is boosted via the three-level boosting circuit, inverted and output via the three-level inverting circuit; while the input source is a relatively high voltage, the relatively high voltage is inverted and output via the three-level inverting circuit and wherein the output of the three-level ac generating circuit is power grid.