As the latest generation of flexible AC transmission system (FACTS) devices, the unified power flow controller (UPFC) has comprehensive control capability and has played an important role in modern power systems. Research on UPFC steady-state power flow regulation capability is valuable for the design and operation of UPFC projects. To analyze the UPFC regulation capability, in this paper, the interaction between the UPFC and the external system is studied and the key factors of UPFC regulation capability are analyzed. It is demonstrated that the changes in the voltage magnitude and phase angle difference of UPFC-embedded line terminals will hinder the UPFC from regulating the power flow and decrease the UPFC regulation capability. Therefore, the UPFC power flow regulation capability is not only related to the parameters of the UPFC and its installation line, but also related to grid parameters. To analyze the UPFC active power flow regulation capability in practical power grids, the relationship between the UPFC regulation capability and grid parameters is deduced, and an estimation method is proposed to calculate the regulation range. Then, the estimation method is applied in the Chuxiong Power Grid and compared with power flow calculations. The results verify the UPFC power flow regulation characteristics given by the analysis and the effectiveness of the estimation method. Besides, it is shown that the estimation method can lower the requirements for the power flow calculation program, and reduce computation load.