In this paper, a D-Q model of fuzzy based unified power flow controller (UPFC) has been proposed to control the active and reactive power flow through the transmission lines. Power loss reduction also intends with the proposed UPFC controller. The UPFC's shunt and series controllers are developed based on D-Q fuzzy logic (FL) controller, which has been designed in PSCAD environment as an independent module. The proposed UPFC controller is tested by using IEEE-5 and 14 bus systems. The performance of D-Q fuzzy based UPFC reveals better improvement compared to PI based UPFC in terms of power flow control and power loss reduction.