The quality of power is important one of the distribution system, and it identify the voltage and current based distribution system power quality problem. The Voltage sag and swell is also to create power quality problem. In this power quality problem creates the frequency oscillation in the distribution system, so the output stability is affected. Because of this limitation, design of these improved model of controlling are properly required. The UPQC (Unified Power Quality Conditioner) is utilized to compensate the power quality problem and reduce the unbalanced voltage of this system. The proposed Substantial Transformation Intrinsic Algorithm (STIA) based UPQC is used to analysis the unbalanced voltage of this power distribution system. This proposed UPQC system is inject the real power to the transmission line, so the unbalanced voltage is compensate. Such that the injected voltage is controlled with help of series nd shunt active filter, and the angle of voltage injection is also controlled. The proposed STIA technique is used to give the proper pulse of this shunt and series converter to optimize the power quality problem with help of injecting the real power in this transmission line. The proposed Substantial Transformation Intrinsic Algorithm (STIA) method has run through the SIMULINK model, and this system attain the good performance, reduce the losses and increase the stability of power transmission line.