This paper implements a 125 level asymmetric cascaded multilevel inverter using fuzzy logic which is used in the dynamic voltage restorer. The inverter is designed with a reduced number of switches. The higher switching frequency is defined for the better performance of the multilevel inverter. The 125 level output is obtained in this proposed approach with only twelve switches and six voltage sources. By changing the switching frequency, the proposed output voltage level is obtained in the inverter. The paper is organized into two phases. In the first step the design of 125 level inverter is proposed, and in the second phase, the power quality improvement using the designed inverter is discussed. The proposed design of an inverter is implemented for dynamic voltage restorer solves the power quality problems such as are voltage sag, voltage swell, and harmonics. The power quality issue mitigation performance is increased with the proposed 125 level inverter. The enrichment of the proposed design is investigated using the comparison of existing works. The proposed work is implemented in the Matlab/Simulink environment. © 2019, Springer Science+Business Media, LLC, part of Springer Nature.