This paper analyzes an eigenvalue distribution and enhancement of the small signal stabiligy when an Unified Power Flow Controller (UPFC) modeling is connected into the multi-machine power system. Recently a lot of attention has been paid to the subject of dynamic stability. It deals with analysis of eigenvalue sensitivities with respect to parameters of UPFC Controller and damping of interarea and local electromechanical oscillation modes using UPFC Controller. It provides an insight and understanding in the basic characteristics of damping effects of UPFC Controller and shows a very stable frequency response via UPFC in test model. The series branch of the UPFC is designed to damp the power oscillation during transients, while the shunt branch aims at maintaining the bus voltage and angle. Comprehensive time-domain simulation studies using PSS/E show that the proposed robost UPFC controller can enhance the small signal stability efficiently in spite of the variations of power system operating conditions.