Abstract –A power system must be capable to regain its stability and desired performance following any change of operating point. To meet satisfactory voltage regulation and damping performance on a wide range of operating conditions, the designed automatic voltage regulators (AVR) and power system stabilizers (PSS) must be enough robust, by working in a coordinated manner. This paper presents an overview of the key issues and new challenges on coordinated AVR-PSS design in interconnected power systems. A brief survey on the recent developments is presented, and new challenges imposed by introducing renewable energy sources (RESs) are emphasized.