In this paper, real, reactive power, and voltage balance of the unified power-flow control (UPFC) system is analyzed. Two important results related to UPFC control are shown in this paper. First, the shunt converter provides all of the required reactive power during the power-flow changes if the UPFC bus voltage is constant. Second, the UPFC bus voltage can be controlled both from the sending side and from the receiving side. Based on the analysis, a novel coordination controller is proposed for the UPFC. The basic control strategy is such that the shunt converter controls the transmission-line reactive power flow and the dc-link voltage. The series converter controls the transmission-line real power flow and the UPFC bus voltage. The real/reactive power coordination controllers in the UPFC control system can obtain good performance both during transient and stable conditions. Experimental works have been conducted to verify the effectiveness of the proposed control strategy.