This paper analyzes the LCL filter mathematical model of STATCOM under the topology of cascaded H-bridge inverter. The impacts of LCL filter parameters on the stability of STATCOM, filter characteristics, compensation effect and power losses of damping resistor are studied. A new method of linear optimization about induction ratio is proposed. While reducing power losses of damping resistor, LCL parameters are precisely designed to make STATCOM system output characteristics meet the design requirements. Finally, through building cascaded STATCOM (10 kV, 6 MVar) experimental prototype, the feasibility and advantage of this method are confirmed.