This paper proposes a novel control strategy of the three-phase four-wire dynamic voltage restorers (DVR) under the grid voltage unbalance and nonlinear loads in the distribution system, where a feedback linearization technique is applied. By the input-output feedback linearization for the nonlinear model of DVR with the PWM voltage source inverter (VSI) and the LC filters, the system is linearized and then the controller of the linearized model is designed by a linear control theory. With this control strategy, the control performance of the DVR becomes faster and more stable under the unbalanced source voltages and loads as well as the nonlinear loads. PSIM simulation and experimental results have proved the effectiveness of the proposed control scheme.