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This paper investigates the effectiveness of dynamic voltage restorer (DVR) for voltage sag mitigation. DVR can compensate the voltage sag problem as well as increase the optimization of the distribution to overcome the harmonic distortion during mitigation process. In this study, the DVR system is simulated using PSCAD software. This device will be connected in series to the problem circuit and calculation for voltage sag and voltage injection by DVR system are described. The variable that are considered to obtain an optimum performance of the DVR are various value of voltage supply, capacitor values and the MVA transformer rating. The results show that optimum values of this variable are necessary to obtain the best DVR performance. Finally, the effect of MVA rating and the secondary voltage for transformer at specific location will be investigated to determine the effectiveness of the DVR.