This chapter presents the principles of operation and performance characteristics of different flexible ac transmission systems (FACTS) controllers. The FACTS concept was originally created in the 1980s to solve operation problems due to the restrictions on the construction of new transmission lines, to improve power system stability margins, and to facilitate power exchange between different generation companies and large power users. Different types of FACTS controllers have been developed and implemented, for shunt and/or series compensation. The concept of VAR compensation using FACTS controllers embraces a wide and diverse field of both transmission system and customer problems, especially related with power quality issues, since most of power quality problems can be attenuated or solved with an adequate control of reactive power. Thyristorized and self-commutated FACTS controllers are very similar in their functional compensation capability, but the basic operating principles, as shown, are fundamentally different.