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The current status of distributed generation technologies and Flexible AC Transmissions (FACTS) Technologies is reviewed. Then this paper discusses a framework for operation and control of smart grids with distributed generation and FACTS in which two controls such as voltage control and stability control are included. In light of the different time scale requirements of voltage control and stability control, a global coordinated strategy is proposed for voltage control while a decentralized control strategy is utilized for stability control. Within these two controls, the ways of the participation of distributed generation and FACTS, for instance, in voltage control and stability control are discussed in order to make the power grids smart in terms of operation flexibility and enhanced control capability.