In this paper presents a Design of a Unified Power Quality conditioner (UPQC) connected to three phase four wire system (3P4W). The neutral of series transformer used in the fourth wire for the 3P4W system. The neutral current that may flow toward transformer neutral point is compensated by using a four-leg voltage source inverter topology for shunt part. The series transformer neutral will be at virtual zero potential during all operating conditions. Here we observe the power quality problems such as unbalanced voltage and current, harmonics by connecting non linear load to 3P4W system with Unified Power Quality conditioner. A new control strategy is proposed to the control algorithm for series APF is based on unit vector template generation to compensate the current unbalance present in the load currents by expanding the concept of single phase P-Q theory. The P-Q theory applied for balanced three phase system. And also be used for each phase of unbalanced system independently. The MATLAB/Simulink based simulations are provided the functionality of the UPQC.