The dc-link voltage fluctuation caused by the change of working state of the load motor has been one of the key issues in the pulse width modulation rectifier-inverter system. In this study, an improved model predictive control (MPC) scheme is proposed to address this problem. The MPC is applied to both the rectifier stage and the inverter stage in the system. Direct power control is used in the rectifier stage and the direct torque control is employed in the inverter stage, with the key novelty of the active power reference values being defined by both real-time and periodic compensation power based on the system-level power-balance model. Meanwhile, an MPC algorithm based on a two-step prediction is introduced to compensate for the delay of a digital controller. Comparison has been conducted between the proposed scheme and three other methods. Simulation and experimental results show that the proposed control scheme exhibits good performance in both the rectifier stage and the inverter stage with improved dynamic response and suppressed voltage fluctuation of the dc-link voltage.