In this paper, the power loss due to PV module mismatch in PV string is analyzed and a mismatch compensation method is proposed to improve the efficiency of PV system. The analysis of mismatch loss using PV model simulation reveals that the mismatch module may decrease the total efficiency because the MPPT function of power conditioner make the PV system operate at the local maximum point. The mismatch loss can be severe if the maximum power point current of mismatch module is less than that of string. The proposed compensation method which is simply implemented with a buck type converter shows the possibility to remove the mismatch loss. The effectiveness of the analysis and compensation method is verified by a prototype experiment.