Unified power flow controller (UPFC) provides a new control method for reactive power optimization in power system. Based on this, the UPFC steady-state model suitable for the new UPFC topology is first established and introduced into the reactive power optimization problem. Then, the objective function and constraints of the multi-objective reactive power optimization problem are defined by considering the constraints of the number of reactive power equipment actions, and a multi-objective reactive power optimization model considering UPFC is established. Then, a multi-stage method is proposed to solve the problem. In the first stage, the original problem is relaxed and normalized to unify the dimensions of multiple objectives; in the second stage, the Pareto optimal candidate solution set of the relaxation problem is obtained based on the normalized plane constraint method, and the selection method of the compromise solution is given. In the third stage, the integer variables in the compromise solution are reorganized based on the triangular penalty function method to obtain the optimal compromise integer solution of the original problem. Finally, the optimal compromise integer solution of the original problem is obtained. The actual equivalent system of Nanjing western power grid is tested by an example, which verifies the effectiveness of the algorithm and the application prospect of UPFC in reactive power optimization.