This paper proposes a novel UPQC(unified power quality conditioner) based on H-bridge modules, isolated through single-phase multi-winding transformers. The dynamic performance of proposed system was analyzed by simulation with PSCAD/EMTDC, assuming that the UPQC is connected with the 22.9kV distribution line. The proposed system can be directly connected to the transmission line without series injection transformers. It has flexibility in expanding the operation voltage by increasing the number of H-bridge modules and can compensate reactive power, harmonics, voltage sag and swell, voltage unbalance. The proposing UPQC has the ultimate capability of improving power quality at the point of installation on power distribution systems.