The nonlinear characteristics of power electronic devices give rise to two important limitations; they generate harmonics and draw lagging current from the utility. The UPQC mitigates harmonics and provides reactive power to the power systems network so as to improve the power factor close to unity. The UPQC is a combination of shunt active and series active power filters connected through a dc bus. The aim of this paper is to make comparative performance analysis and develop control strategies of UPQC based on fuzzy-PI controller.