After a disturbance occurrence, fast damping of power oscillations is essential to reduce the risk of instability and thus increase the power transfer capacity of transmission systems. Recently, the Static Series Synchronous Compensator (SSSC) has justified its ability to improve power oscillation damping. Due to substantial interactions among the SSSC damping control loops and the power system variables, the use of conventional Single-Input Single-Output (SISO) control approaches results in a poor damping performance. In this paper, these interactions are taken into consideration, and a power system equipped with an SSSC is modeled as a multivariable system. The impact of the SSSC’s dc voltage dynamic is also considered in the modeling. The power system equipped with an SSSC is multivariable with effective interactions among its variables. Traditional SISO control design techniques do not take into consideration these interactions and therefore cannot provide adequate damping over a wide range of operating conditions. Based on this developed multivariable modeling, a multivariable controller is proposed to improve power oscillation damping while keeping the dc-link voltage regulated. Simulation results verify the validity of the proposed modeling and control and show that the proposed approach can successfully damp out power system oscillations. Further simulation results show that the proposed controller provides a superior performance and a better robustness when compared to conventional SISO controllers.