The proliferation of power electronics based equipment has produced a significant impact on the quality of electric power supply. Conventional power quality mitigation equipment is proving to be inadequate for an increasing number of applications, and this fact has attracted the attention of power engineers to develop dynamic and adjustable solutions to power quality problems. This has led to development of Custom Power Devices (CPD). One modern and very promising CPD that deals with both load current and supply voltage imperfections is the Unified Power Quality Conditioner (UPQC). This paper investigated the development of UPQC control schemes and algorithms for power quality improvement and implementation of a versatile control strategy to enhance the performance of UPQC. The proposed control scheme gives better steady-state and dynamic response. The validity of the proposed control method is verified by means of MATLAB/SIMULINK.