Voltage and current waveform distortion is a most important power quality concern, because a small fluctuation with phase supply, transient condition occurs and unbalanced of phase voltage can create a more derange within phase currents. Three phase balanced system holds only positive sequence constituents of voltage, current, and impedance, whereas both positive and negative sequence constituents of voltages and currents within unbalanced system. The voltages at the generation system side are in sinusoidal wave and have constant equivalent magnitude value within 120 degrees phase difference. However, unbalanced condition arises due to inadequacy in voltage magnitude and in fundamental frequency in load side. This paper proposes the shunt-connected current inserting Distribution Static Synchronous Compensator (D-STATCOM) through appropriate controlling scheme tomoderate and compensate the unstable load current. It works as quick reimbursing source for reactive power that is functional on the distribution power system to moderate voltage deviations like voltage sags, swells, and voltage flicker along with unsteadiness produced by quickly changing reactive power demand. This paper presents the scheme and Simulink model of D-STATCOM within PI controller toward improving the superiority of power under dissimilar irregular circumstances like symmetrical and unsymmetrical faults. The controller working efficiency is tested under different fault conditions. The performance of D-STATCOM under different fault conditions in power distribution system is carried out at three phase supply 20 kV, 50 Hz. The controller and D-STATCOM model are designed through Simulink and Power System Blockset toolbox existing in MATLAB program.