In the present era, power quality becomes the most important concern in electrical power systems. This phenomenon has become an increasing concern to utilities and their customers in the process of power delivery. The utilities faced numerous power quality problems such as voltage sag/voltage swell, flicker, interruption, harmonic distortion, and other different types of power system disturbances. These power quality problems result in production loss, equipment damage, cost for restart of process, loss of resources and time. Hence, it is very significant to analyze these complications and solve them by using power quality enhancement devices for electric power systems such as D-STATCOM (distribution static compensator), unified power quality conditioner (UPQC), and Dynamic Voltage Restorer (DVR). In this thesis, a literature-based comparative study was conducted among D-STATCOM, DVR, and UPQC for the use of the best custom power device in terms of power quality enhancement, speed of operation, and cost. From the study, it is founded that UPQC is much more flexible than separately configured DSTATCOM and DVR in mitigating both the supply side and load side power quality disturbances that are found in the case study area. Design of shunt and series parts of UPQC together with their respective controllers was done and modeling of Dessie distribution system was developed using MATLAB software. In this thesis, UPQC is used to mitigate voltage sag, voltage swell, voltage harmonics, and current harmonics in the distribution system. A 60% three-phase voltage sag has occurred at phase A, phase B, and phase C for a duration of 0.1s. The UPQC was found to be able of compensating these sag voltages by generating and injecting 138V phase to ground voltage to the network. The voltage swell with a 40% rise in magnitude was introduced to the system and UPQC succeeded to protect the load from this voltage swell by keeping its value to 230V. In another case, fifth and seven harmonics are imposed to source voltage and the total harmonics distortion of source voltage was 25% and it is reduced to 0.85% after UPQC compensation. The total harmonics distortion of 0.85% complies with the voltage harmonic IEEE std. 519. In current harmonics mitigation, the distorted source current due to non-linear loads has THD of 30.59% and after compensation, its THD was reduced to 3.12%, 2.36%, and 0.89% by using the pq-PI method, dq-PI, and dq-Fuzzy logic controllers respectively. This thesis has also demonstrated optimal placement and sizing of UPQC in multi-bus distribution using voltage stability index and differential evolution. From the backward-forward load flow analysis, installation of the one UPQC by the proposed methods leads to 21.6% real power loss reductions and improves the bus voltage profile of all the nodes. Installation of the two UPQCs at different locations results in the minimum voltage from all buses being improved to 0.9548 p.u and the real power losses have been reduced to 49%. Keywords: Custom Power Device, Harmonics, Power Quality, Voltage Sag, Voltage Swell and Differential Evolution.