This paper proposes a novel single-dc-source multilevel inverter called Packed E-Cell (PEC) topology to achieve nine levels with noticeably reduced components count, while dc capacitors are actively balanced. The nine-level PEC (PEC9) is composed of seven active switches and two dc capacitors that are shunted by a four-quadrant switch to from the E-cell, and it makes use of a single dc link. With the proper design of the corresponding PEC9 switching states, the dc capacitors are balanced using the redundant charging/discharging states. Since the shunted capacitors are horizontally extended, both capacitors are simultaneously charged or discharged with the redundant states, so only the auxiliary dc-link voltage needs to be sensed and regulated to half of the input dc source voltage, and consequently, dc capacitors' voltages are inherently balanced to one quarter of the dc bus voltage. To this end, an active capacitor voltage balancing integrated to the level-shifted half-parabola carrier PWM technique has been designed based on the redundant charging/discharging states to regulate the dc capacitors voltages of PEC9. Furthermore, using the E-cell not only reduces components count but also the proposed topology permits multi ac terminal operation. Thus, five-level inverter operation can be achieved during the four-quadrant switch fault, which confers to the structure high reliability. The theoretical analysis as well as the experimental results are presented and discussed, showing the basic operation, multi-functionality, as well as the superior performance of the proposed novel PEC9 inverter topology.