This article analyzes a switched-capacitor-based seven-level inverter modulated by a hybrid of level- and phase-shifted pulsewidth modulation (PWM) algorithm in detail. The optimal design of circuit parameters is also presented to ensure this hybrid PWM algorithm gives full play to its advantages. The two capacitors employed in this inverter operate alternately in charging and discharging states at carriers' frequency of this PWM algorithm, to provide different output voltage levels. With reasonable parameter design as addressed in this article, both capacitors can be fully charged every time and the phenomenon of capacitors' voltage ripple accumulation existed in other works is no longer found in this seven-level inverter. All transistors employed in this inverter are switched under low switching stress, resulting in less switching loss. Both simulation and experimental results are provided to demonstrate the correctness of theoretical analysis, and the maximum measured efficiency is up to 96.4%.