A voltage regulator generates an output voltage that is a designed voltage level below the supply voltage. A reference voltage generator generates a reference voltage between ground and supply voltages. A voltage divider generates a feedback voltage between the supply and output voltages. An amplifier generates an amplifier output voltage based on a difference between the reference and feedback voltages. A buffer buffers the amplifier output voltage. A pass transistor receives the buffered voltage at its control node to sink an average load current appearing at the output node. A capacitor is connected between the supply and output voltages to provide a peak load current. A load-current-detecting transistor receives the buffered voltage at its control node to sense the load current. A compensation transistor compensates for leakage current. An internal load converts the sensed load current into a voltage control signal applied to the compensation transistor.