The ability to provide quality power has become a significant issue in power systems. The main causes of poor power quality are harmonic currents, poor power factor, supply-voltage variations, etc. A technique of achieving both active current distortion compensation, power factor correction and also mitigating the supply-voltage variation (sag or swell) at the load side is presented in this paper. The operation and rating issues of the proposed Single-phase Unified Power Quality Conditioner are also highlighted. To reduce the total cost while simultaneously increasing the performance, the system is fully digitally controlled using the fixed-point TMS320F240 digital signal processor. The performances of the UPQC, which is composed by shunt and series PWM controlled-converters, have been verified on a laboratory prototype.