This paper proposes a new control scheme for the power factor improvement of DC power regenerating systems, which can regenerate the excessive DC power from DC bus line to AC supply in substations for traction systems. From the viewpoint of both power capacity and switching losses, the system is designed on the basis of three-phase square-wave inverters and composed of two inverters, zig-zag connected output transformers, and an AC filter. The output voltages of the regenerating system are not sinusoidal. However, regenerated complex power is analyzed on the basis of fundamental components and thus the reactive power produced by harmonics is not considered. Therefore, it is needed a new control scheme capable of controlling the reactive power nearly to zero even for nonsinusoidal cases. To verify the validity of the proposed control scheme, computer simulations are carried out. And the results show that the power factor is theoretically higher than 0.99.