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In this study, the design and analysis of a fuzzy logic (FL) controlled dynamic voltage restorer (DVR) are presented and extended to perform fast fault detection. A new control method for DVR is proposed by combining FL with a carrier modulated PWM inverter. The proposed control scheme is simple to design and has excellent voltage compensation capabilities. The proposed method for voltage sag/swell detection has the ability of detecting different kinds of power disturbances faster than conventional detection methods. Effectiveness of the proposed detection method is shown by comparison with the conventional methods in the literature. Simulation results under unbalanced supply voltage are presented to evaluate the performance of the designed DVR.