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The analysis of power systems under fault condition represents one of the most important and complex tasks in power engineering. The study and detection of these faults are necessary to ensure that the reliability and stability of the power system do not suffer a decrement as a result of a critical event such as fault. The purpose of this thesis is to develop and to present an educational tool for students to model FACTS devices using Simulink. Furthermore, the development of this thesis provides the means for students to model different types of faults. The development is based on presenting a power system – the Test System - by its simplest form including generation, transmission, transformers, loads and STATCOM device as an example of the general FACTS devices. The thesis includes modeling of the Test System using Simulink and MATLAB program to produce the results for further analysis. The findings and development included in the thesis is intended to serve as an educational tool for students interested in the study of faults and their impact on FACTS devices. Students may use the thesis as the building block for developing models of larger and more complex power systems using Simulink and MATLAB programs for further study of impacts of FACTS devices in power systems.