This paper presents a new high-performance controller design for three-phase uninterruptible power supply (UPS) systems operating under highly nonlinear loads. The controller improves on the classical sinusoidal pulsewidth modulation (SPWM) method by adding inner control loops that enable it to better compensate for harmonics and distortion caused by rectifier loads. The controller is developed and analyzed using Simulink and implemented on a TMS320F2808 DSP chip. Experimental results from a 10kVA UPS system show the controller successfully regulates voltages and meets total harmonic distortion and dynamic response standards for UPS systems.