The novel design idea and method of an integration system of distribution transformer and static synchronous compensator（DT-STATCOM） is proposed. Based on the power balance principle， STATCOM is accessed in the system from the taps at transformer high voltage windings to make full use of the spare capacity of the distribution transformer compensating the system reactive power. The theoretical basis for DT-STATCOM reactive power compensation is described， several system structures of DT-STATCOM are presented. For Dyn type transformers， the structure of DT-STATCOM with multi-tap at the transformer high voltage windings is emphatically studied， and its influence on the current distribution in the transformer windings is analyzed， at last an appropriate tap voltage is selected. Simulation results show that the proposed DT-STATCOM system structure has good performance of reactive power compensation.