An UPQC (Unified Power Quality Conditioner) is an equipment composed by two active conditioners operating in a combined way. One of the active conditioners is connected in series with the electrical power system, allowing the compensation of problems in the system voltages. The other active conditioner is connected in parallel with the electrical system, and allows the compensation of current harmonics, current unbalances and power factor. In three-phase four-wire systems the parallel connected active conditioner also compensates the zero sequence current components, eliminating the neutral wire current. The UPQC operates in an automatic way, adjusting itself dynamically to the variations of the load and of the electrical system, keeping high levels of power quality in the voltages delivered to the load. At the same time, it only consumes from the electrical system the active power necessary to the load operation, in a balanced way through the three phases, and with sinusoidal currents. The compensation capabilities of the UPQC can be very useful to ensure high levels of power quality in the future Smart Grids, which are not characterized as a single technology or device, but rather as a vision of a distributed electrical system, supported by reference technologies, as Power Electronics Devices, Renewable Energy Resources, Energy Storage Systems (ESS), Advanced Metering Infrastructures (AMI), and Information and Communication Technologies (ICT).