This paper uses the Particle Swarm Optimization (PSO) technique to investigate the damping control function of an Interline Power Flow Controller (IPFC) installed in a power system. For this purpose, the linearized Herffron-Phillips model of a Single-Machine Infinite Bus (SMIB) system is established and a performance index which is defined based on the system dynamics is applied as an objective function to evaluate the potential of various IPFC control signals upon the power system’s different operating conditions. The results in time-domain simulation analysis reveals that the designed PSO based IPFC controller tuned by the proposed objective function has an excellent capability in damping power system low frequency oscillations and enhance greatly the dynamic stability of the power systems. Moreover, the system performance analysis under different operating conditions show that the m1 (magnitude of injected voltage) based controller is superior to the other based controller.