This paper proposes a Alternate Phase Opposition Disposition (APOD) strategy to achieve balanced line-to-line output voltages and to reduce the harmonic distortions by maximize the modulation index in the linear modulation range where the output voltage can be linearly adjusted in the multilevel cascaded inverter (MLCI) operating under unbalanced dc-link conditions. In these conditions, the linear modulation range is reduced, and a significant output voltage imbalance may occur as voltage references increase. Compared to the conventional multilevel inverter, the number of dc voltage sources, switches, installation area and converter cost is significantly reduced as the number of voltage steps increases. From this analysis, the theory behind the output voltage imbalance is explained, and the maximum linear modulation range considering an unbalanced dc-link condition is evaluated. After that, a Alternate Phase Opposition Disposition strategy is proposed to achieve output voltage balancing as well as to extend the linear modulation range up to the maximum reachable point in theory.Both the simulations and the experiments for a thirteen-level phase-shifted modulated MLCI for electric vehicle traction motor drive show that the proposed method is able to balance line-to-line output voltages as well as to maximize the linear modulation range under the unbalanced dc-link conditions.