In this paper, a new methodology is proposed to mitigate the unbalanced voltage sag with phase jumps by Unified Power Quality Conditioner (UPQC). UPQC is used to mitigate both voltage and current power quality (PQ) problems. During the process of mitigation, UPQC is supposed to inject real and reactive power into the system to mitigate current (shunt) and voltage (series) power quality (PQ) problems. As per the sensitive load concerns, deep and long duration sags are more vulnerable than shallow and short duration sags. To resolve these issues a new methodology is proposed with optimal Volt-Ampere (VA) loading on UPQC to mitigate deep and long duration unbalanced sag with phase jumps. Particle Swarm Optimization (PSO) is utilized as a tool for evaluating the optimal VA loading of UPQC with constraints like magnitude of injected voltage from Series active power filter, Total Harmonic Distortion (THD) of source current and terminal voltage. The proposed methodology ensures optimal VA loading on UPQC without compromising mitigation capability of the UPQC. The proposed method has been validated through detailed simulation studies. ©2010 IEEE.