Control strategy of unified power flow controller (UPFC) utilizing dq decoupling control is deduced in this paper, which can closely follow the control orders of the active and reactive power. The subsynchronous resonance (SSR) characteristics of a series compensated system equipped with UPFC are studied, and the results reveal that SSR characteristics of the system may vary significantly with UPFC in service or not. Consequently, supplementary subsynchronous damping controller (SSDC) for UPFC is proposed and investigated, and the effectiveness of the proposed SSDC is verified by damping torque analysis and time domain simulations.