While the matrix converter has many advantages that include bi-directional power flow, a size reduction, a long lifetime, and sinusoidal input currents, it is vulnerable to the input voltage disturbances, because it directly exchanges the input voltage to the output voltage. So, in this paper, a critical evaluation of the effect of various abnormal voltage conditions like unbalanced power supply, balanced non-sinusoidal power supply, input voltage sags and short time blackout of power supply on matrix converter fed induction motor drives is presented. The operation under various abnormal conditions has been analyzed. For this, a 230V, 250VA three phase to three phase matrix converter (MC) fed induction motor drive prototype is implemented using DSP based controller and tests have been carried out to evaluate and improve the stability of system under typical abnormal conditions. Digital storage oscilloscope & power quality analyzer are used for experimental observations.