This paper presents the design of a high-performance sinusoidal pulsewidth modulation (SPWM) controller for three-phase uninterruptible power supply (UPS) systems that are operating under highly nonlinear loads. The classical SPWM method is quite effective in controlling the RMS magnitude of the UPS output voltages. However, it is not good enough in compensating the harmonics and the distortion caused specifically by the nonlinear currents drawn by the rectifier loads. The distortion becomes more severe at high power where the switching frequency has to be reduced due to the efficiency concerns. This study proposes a new design strategy that overcomes the limitations of the classical RMS control. It adds inner loops to the closed-loop control system effectively that enables successful reduction of harmonics and compensation of distortion at the outputs. Simulink is used to analyze, develop, and design the controller using the state-space model of the inverter. The controller is implemented in the TMS320F2808 DSP by Texas Instruments, and the performance is evaluated experimentally using a three-phase 10 kVA transformer isolated UPS under all types of load conditions. In conclusion, the experimental results demonstrate that the controller successfully achieves the steady-state RMS voltage regulation specifications as well as the total harmonic distortion and the dynamic response requirements of major UPS standards.