© 2020 John Wiley & Sons LtdBackground: MC has many advantages such as no need for high-value filters, capability of bi-directional energy conversion and no need for DC bus. However, distortion in the source voltage, such as noise or harmonics may be reflected directly on the load side due to the lack of any storage elements. Purpose: This paper proposes an effective method for finite control set model predictive control (FCS-MPC) implemented in matrix converter (MC) to overcome these possible drawbacks and to improve source current quality under distorted source voltage conditions. Method: Proposed approach based on instantaneous unity power factor (IUPF) strategy is applied to compensate for disturbance in the source voltage. In order to achieve this, phase-locked loop (PLL)-based virtual source voltage is generated at the same frequency as the source voltage to obtain sinusoidal reference current to be used in FCS-MPC. Design: Proposed method is performed using TMS320F28335 Digital Signal Processor (DSP) that is a 32-bit floating-point processor operating at 150MHz. Results: Experimental results show that it is possible to obtain sinusoidal current waveforms on both sides despite the distortions in source voltage or harmonics due to the proposed virtual source voltage strategy. Conclusion: The results obtained from the experimental set-up confirm the performance of the proposed method.