In three-phase four-wire systems, unbalanced loads can cause grid currents to be unbalanced, and this may cause the neutral point potential on the grid side to shift. The neutral point potential shift will worsen the control precision as well as the performance of the threephase four-wire unified power quality conditioner (UPQC), and it also leads to unbalanced three-phase output voltage, even causing damage to electric equipment. To deal with unbalanced loads, this paper proposes a matching-ratio compensation algorithm (MCA) for the fundamental active component of load currents, and by employing this MCA, balanced three-phase grid currents can be realized under 100% unbalanced loads. The steady-state fluctuation and the transient drop of the DC bus voltage can also be restrained. This paper establishes the mathematical model of the UPQC, analyzes the mechanism of the DC bus voltage fluctuations, and elaborates the interaction between unbalanced grid currents and DC bus voltage fluctuations; two control strategies of UPQC under three-phase stationary coordinate based on the MCA are given, and finally, the feasibility and effectiveness of the proposed control strategy are verified by experiment results.