Flexible AC Transmission Systems (FACTS) are systems based on power electronics using GTO or IGCT semiconductors [1] that allow a better use of the transfer capacities of the transmission lines and permit to satisfy the requirements due to the liberalization of the electrical energy market. The Unified Power Flow Controller (UPFC) is one of the most versatile topologies of the FACTS family. The UPFC can be decomposed in two different power circuits: the parallel one maintaining the network bus voltage by consuming or producing reactive power, and the series one controlling the active and reactive power flow with the insertion of a series voltage in the transmission line. The aim of the present paper is to investigate in details the power quality and the dynamic performance of the 3-level UPFC.