Dynamic Voltage Restorer (DVR) is connected in series with the distribution network in order to compensate the load voltage by the fast injection of suitable voltages to the system. The merits of DVR are the fast dynamic response and lesseer power rating than the load power, so it is an economical choice for the sag compensation. The DVR control block determines magnitude and phase angle of the injected voltages through using some control algorithms. In this thesis, after a review of the previous researches, balanced and unbalanced voltage swells are simulated for investigating the influence of three compensation strategies, inphase, presage and minimum energy on energy storage devices during the voltage swell. Then, saving energy method consisted of minimum energy, maximum energy and zero injected power strategies, is introduced. This method is based on choosing the proper injected voltage angle to control the voltage across the dc link capacitor. A supervisory control scheme is introduced as the outer control loop that can improve compensation capability of DVR during serious voltage sags and swells. Finally, DVR is completed by a proper protection scheme that prevents from flowing dangerous currents into DVR when a fault occurs in down-stream of DVR. After design, simulation and investigation of dynamic responses of a simulated DVR, a laboratory DVR rated at 3 KVA and 230V was designed and implemented. Since real time data processing and simultaneous application of control algorithms and switching pulses generation are required, a digital signal processor board with fast processing and information interchanging abilities was employed. All necessary circuits including analog to digital converter, isolation between power circuit and digital circuit, IGBT drivers, dead band generator, 15 volt power supplies, injection transformers and low pass filter were designed and implemented. In addition a voltage sags and swells generator was designed and implemented for testing the DVR performance. This device can generate sag and swell with one cycle to three econds intervals. Experimental results show that the implemented DVR is able to compensate various voltage sags and swells in less than few milliseconds after occurrence of disturbance.