In this paper, the behavior of a doubly fed induction generator (DFIG) is studied under unbalanced grid voltage conditions. It is shown that if no special control efforts are employed, the behavior of the generator is deteriorated, basically due to two reasons: electromagnetic torque oscillations and nonsinusoidal current exchange with the grid. These phenomena are first analyzed theoretically as a function of the stator active and reactive instantaneous power exchange by the stator of the DFIG and the grid-side converter (GSC). This analysis provides the main ideas for generation of the active and reactive power references for the rotor-side converter (RSC) and the GSC, controlled by means of direct power control techniques. Therefore, this paper proposes a new algorithm that generates the RSC power references, without the necessity of a sequence component extraction, in order to eliminate torque oscillations and achieve sinusoidal stator currents exchange. On the contrary, the GSC power references are provided by means of voltage and current sequence extraction. Finally, simulation and experimental results successfully validate the proposed power reference generation methods.