Light flicker perceived by human eye and malfunction of sensitive equipment are some of the unwanted effects due to the voltage fluctuation. In this paper, application of series capacitor for suppression of voltage fluctuation is presented. A simple system containing an arc furnace as a source of voltage fluctuation has been employed for this study. Simulation is conducted on a simple test system using EMTDC with and without the capacitor installed in the test system. Different flicker amplitude and frequency are examined with the emphasis being placed on those parameters that have more annoying effects on the human eye. Simulation results demonstrated that the series capacitor has a significant role in suppression of voltage flicker in the test system. The effect of load power factor is also studied in this paper.