This paper proposes a new interline hybrid unified power quality conditioner ( IHUPQC) structure to improve the power quality of distribution feeders and to decrease the power ratings/voltages and switching losses of voltage source converters ( VSCs). The IHUPQC consists of dynamic voltage restorer ( DVR), an isolated dc-dc converter and a shunt hybrid active power filter ( SHAPF) with a common dc bus. The inverse park phase locked loop ( IP-PLL) technique is used to detect the distortions of signals in both feeders. Sinusoidal pulse width modulation ( SPWM) based voltage control and current control are used for DVR and SHAPF respectively. The isolated dc-dc converter has PI controller based simple phase shift ( SPS) technique. The proposed structure is designed for 34.5 kV voltage level and simulated by using PSCAD/EMTDC to verify system.