Power quality is a growing concern as the number of electric sensitive loads is increasing day by day in all fields. Poor power quality is badly affecting sensitive loads causing instability, malfunctioning, loss of data and great loss of economy. Thus, there is a need to improve power quality for which it is required to identify power quality problems occurring in the power system. This paper presents a low cost hardware to detect and classify most occurring power quality problems in the power system such as voltage sag, swell, interruption and unbalance using PIC microcontroller 18F452 for a 3-phase system. An algorithm is developed and the program is written into the microcontroller for classification. The program checks the conditions of the power quality problems based on the magnitudes of 3-phase voltages and classifies them. The system mainly consists of voltage sensing unit and microcontroller which senses 3-phase voltages, identifies the problem and gives output through LCD display, buzzer and LEDs showing type of power quality problem and p.u. voltage values. The circuit also trips load during power quality problems and connects it during normal conditions. The outputs of the hardware are given for various cases of the power quality problems.