The objective of this research is to investigate the performance enhancement of a power system using Flexible AC Transmission System (FACTS) devices. It is intended to show how the reliability and performance of the power system is improved. The focus is to enhance the understanding of the system operating with and without these devices. Power transmission can always be improved by upgrading or adding new transmission circuits. But this is not a practical solution. FACTS devices are feasible alternatives for optimizing the transmission systems. Providing reactive shunt compensation with shuntconnected capacitors and reactors is a well-established technique to get a better voltage profile in a power system. Shunt capacitors lack dynamic capabilities, and so dynamically controlled reactive power compensation is essential. This feature is provided by FACTS devices. Implementation of new equipment consisting high power electronics based technologies such as FACTS becomes essential for improvement of operation and control of power systems. FACTS promote the use of static controllers to enhance the controllability and increase the power transfer capability. Three software tools were used in this thesis, such as, MATLAB, PSCAD and PowerWorld. Thyristor Controlled Reactors (TCR), Thyristor Controlled Series Capacitors (TCSC), Static Var Compensators (SVC) are used as FACTS devices for consideration in the power system study. This thesis aims at examining the ability of FACTS devices and distributed FACTS devices for power flow control and reactive power compensation in a power system.