In this paper, a high-efficiency third harmonic injected pulse width modulation (PWM) scheme is presented for an ultracapacitor-based energy storage system (UCESS). Also, a nonlinear partial feedback linearizing controller is used with the proposed third harmonic injected PWM scheme where the main control objectives are to regulate the active and reactive power injection into the grid from the UCESS. The dynamical model of the grid-connected UCESS is developed from the electrical equivalent circuit, where the grid connection is accomplished through a three-phase voltage source converter (VSC). The grid current components corresponding to both active and reactive power are regulated through the proposed control action. Since the proposed control scheme reduces the order of the original UCESS, the stability of remaining dynamics (i.e., internal dynamics) is investigated before implementing the proposed controller. The implementation of the proposed control scheme also requires the injection of the third harmonic externally as the incorporation of this harmonic during the modeling does not affect the transient and steady-state characteristics of the system. A test distribution system is considered to justify the performance of the proposed scheme through the simulation results. The simulation results show the superiority of the proposed controller as compared to a finely-tuned proportion integral (PI) controller.