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A Unified Power Quality Conditioner (UPQC) is designed using a Neutral Point Clamped (NPC) multilevel inverter to improve the power quality. When designed for high/medium voltage and power applications, the voltage stress across the switches and harmonic content in the output voltage are increased. A 3-phase 4-wire NPC inverter system is developed as Power Quality Conditioner using an effectual three dimensional Space Vector Modulation (3D-SVM) technique. The proposed system behaves like a UPQC with shunt and series active filter under balanced and unbalanced loading conditions. In addition to the improvement of the power quality issues, it also balances the neutral point voltage and voltage balancing across the capacitors under unbalanced condition. The hardware and simulation results of proposed system are compared with 2D-SVM and 3D-SVM. The proposed system is stimulated using MATLAB and the hardware is designed using FPGA. From the results it is evident that effectual 3D-SVM technique gives better performance compared to other control methods.