A simplified loop distribution system is taken as the object and the main reasons leading to the power loss in the feeder are analysed in this paper. According to the natural power distribution theory of the loop systems, the minimum power distribution in the loop power system is deduced through the extremism method. Thinking about the power control function of the unified power flow controller, the control system for the series side of the unified power flow controller is designed based on the voltage control method. This control system insets a series voltage into the controller line and produces a power, which in the same direction with the power of the controlled line and equals to the loop power of the loop system in quantity, and the power loss is decreased by eliminating the loop power in the distribution system. Digital simulations in the loop distribution systems configured by two feeders with different resistance and reactance proportion are made and the results verified the function of UPFC designed in this paper for reducing the power loss of the distribution system.