Generally, power system faces the problem to transfer power from one system to another system without any fluctuations, with minimal of system losses. To overcome this problems, a flexible ac transmission system is implemented in this paper. In present scenario, facts devices are used to reduce the transmission losses for improvising transmission capacity and also to improve the system capability. Unified Power Flow Controller plays a most prominent role in FACTS controller to improve the system stability. The structure of UPFC is combination of back-back converters with boosting and zigzag transformer. This type of UPFC system consists of high losses due to presence of magnetic properties in this transformer. With this, a transformer-less multilevel inverter based UPFC topology is proposed in this paper. This paper focuses on the modulation of transformerless UPFC with PSO, which controlsfundamental frequency for better controlling of active and reactive power, harmonic minimization, and improvement in efficiency of system by controlling DC link voltage.