Power transmission system plays a vital role in transmitting the electric power generated at the generation station to the distribution system. When the power transmission system operates with heavily loaded lines resulting in power losses and higher voltage deviation, which may lead to mal operation of power system and eventually collapse of the system. Growth in customer demand for electrical power is one of the causes for power loss and voltage deviation. Currently transmission line loss minimization in a power system is an important issue and it can be achieved by means of installation of flexible AC transmission system (FACTS) device. The purpose of this thesis is to minimize the transmission power loss and voltage profile enhancement for the Ethiopian North Western Region Transmission System network by using Unified Power Flow Controller (UPFC), which is one of the FACTS devices. The power flow analysis by Newton Raphson algorithm in MATLAB environment is used and particle swarm optimization techniques is adopted for optimal sizing of the device. The result implied that: - within proper placement and optimal setting of the UPFC the active power loss is improved by 21.2%, 29.57%, 37.4% and 47.52% at base load demand, 25%, 50% and 75% load demand increment respectively. The reactive power loss is also improved by 37.3%, 35.4%, 39.54% and 47.85% during base load demand, 25%, 50% and 75% load demand increment respectively. The weak buses voltage magnitudes are improved after the inclusion of UPFC. The lowest bus voltage magnitude during 75% load demand increment is 0.9608 pu, which is above the permissible bus voltage magnitude. Using the payback period and net present value methods of finical measures, the cost benefit analysis is done. Thus, this thesis definitely addressed the mechanism regarding voltage profile enhancement and power loss minimization of transmission line by incorporating the UPFC to the system.