The thesis will try to summarise the major power system problems and the important role of the FACTS devices to enhance the power system quality. Then, it will give a brief description for various FACTS and Active Filters controllers as mentioned on the existing publications. Most of the control schemes introduced in the existing papers were designed either for eliminating current harmonics or eliminating voltage flickers or for load flow control. So, this work is devoted to find a proper optimal control schemes for a system with series or shunt or series and shunt converters that can provide all functions together. Various optimal control schemes will be designed for systems with series, shunt and series-shunt converters with the objective to control the load flow through a lines and to eliminate current harmonics and voltage flickers with different strategies for tracking. Chapter 1: Gives a general description of most power system problems and the basic techniques used to improve the power system quality. It also gives idea about basic objectives from the FACTS devices. Chapter 2: Offers detailed description for the basic types of FACTS devices and active filters existing in power industry. Chapter 3: Describes various shunt controllers for control of the Static Compensator (STATCOM) and various series controllers for the control of the Static Synchronous Series Compensator (SSSC) and various Unified Power Flow Controllers (UPFC) as covered in most existing papers. Chapter 4: Describes the major control schemes for the shunt active filter as covered by most existing papers. Chapter 5: Describes the major control schemes for the other types of active filters as covered by most existing papers. Chapter 6: Gives description for optimal control design. Chapter 7: Case studies to design different optimal control schemes for system with UPFC unit to control the power flow, eliminate voltage flicker and eliminate current harmonics. The case studies were repeated for system with only series or shunt converters.