Shunt compensating devices like distribution static compensator (DSTATCOM) are extensively used for compensating harmonics/unbalance/voltage sag-swell in a power distribution system. The design and performance of DSTATCOM for load compensation with stiff and non-stiff sources have been well reported in literature. Using linear control strategies like linear quadratic regulator (LQR), feedback controllers have been designed for DSTATCOM to track the reference currents for effective compensation under non-stiff source. There are many uncertain parameters like the feeder impedance, load impedance and harmonic content in load currents etc. Due to the parametric uncertainties, feedback controller designed using LQR may not be robust to these uncertainties. In this paper, a particle swarm optimisation- (PSO) based feedback controller is designed for DSTATCOM for load compensation. This feedback controller has optimal performance in various operating conditions and is robust to parametric uncertainties. The performance of the proposed feedback controller is compared with that of the conventional feedback controller designed with LQR. © 2008 Inderscience Enterprises Ltd.