Unified power flow controller (UPFC) is the most reliable device in the FACTS concept. It has the ability to adjust all three control parameters effective in power flow and voltage stability. In this paper, a linearized model of a power system installed with a UPFC has been presented. UPFC has four control loops that by adding an extra signal to one of them, increases dynamic stability and load angle oscillations are damped. In this paper, after open loop eigenvalue (electro mechanical mode) calculations, state-space equations have been used to design damping controller and it has been considered to influence active and reactive power flow durations as the input of damping controller, in addition to the common speed duration of synchronous generators as input damper signal. To increase stability, further Lead-Lag and LQR controllers, a novel on-line adaptive controller has been used analytically to identify power system parameters. Closed-loop calculations of the electro mechanical mode verify the improvement of system pole placement after controller designing. Suitable operation of adaptive controller to decrease rotor speed oscillations against input mechanical torque disturbances is confirmed by the simulation results.