With the development and complication of power system, the problem of low frequency oscillation in electric network becomes obvious. Unified Power Flow Controller is one of the most powerful facilities in Flexible AC Transmission Systems, which can improve the transient stability and damp the low oscillation in power system with suitable control. Considering the characteristics of inverter's output voltage magnitude, adjustment of phase and process of charge and discharge of dc capacitance, the dynamic model of UPFC is proposed by a series of nonlinear differential coefficient equations. Based on UPFC's dynamic model, the linear optimal controller of UPFC with state feedback is proposed. In this way, the low frequency oscillation is damped effectively. A simulation is processed basing the theory.