Abstract: A system and a method for implementing capacity control in a screw compressor, said system comprising; a screw compressor, said compressor driven by a multi-capacity (speed and power) motor to compress air or gas medium, a bypass inlet member with a bypass valve, extending from the high pressure zone to the low pressure zone of the screw compressor to recirculate the gaseous medium, a bypass valve controller functionally connected to said bypass valve, a motor controller functionally connected to the motor to effect multi-capacity (speed and power) operations, a main processing control unit disposed to control the bypass valve and multi-capacity (speed and power) operations, measuring means disposed on the compressed medium passage for measuring the changes in the pressure and/or temperature changes in the form of signals, a signal converter functionally connected to the main processing unit and the measuring means to receive the signals, and said motor controller and bypass valve controller are functionally