This paper proposes the employment of Static Synchronous Compensator (STATCOM) in reactive power compensation to enhance the Fault Ride-Through (FRT) capability and improve the dynamic performance of a grid-connected PV/wind hybrid power system during the transient grid disturbances. The hybrid power system consisting of 9 MW Doubly Fed Induction Generator (DFIG)-based wind farm and 1 MW PV station is integrated with 100 MVAR STATCOM at the Point of Common Coupling (PCC) bus. The dynamic performance of the PV/wind hybrid power system with the proposed STAT-COM controller is analyzed and compared with another FRT control strategy during a grid voltage sag. The FRT control strategy is based on the injection of reactive power from the hybrid system to enhance the FRT capability during the grid faults, and also activation of the outer crowbar protection system to protect the DFIG. On the other hand, the proposed STATCOM controller adjusts the PCC bus voltage during the grid disturbances by dynamically controlling the amount of reactive power injected to or absorbed from the electrical grid. Modeling and simulation of the proposed hybrid power system have been implemented using MATLAB/SIMULINK software. The effectiveness of both the proposed STATCOM controller and the FRT control strategy is evaluated during a 50% grid voltage sag. The simulation results illustrate that the STATCOM controller decreases significantly the level of voltage drop during the voltage sag, maintains the injected active power from the PV station at its rated value, and protects effectively the PV DC-link voltage from overvoltage. Moreover, when the STATCOM controller is employed, the injected active power from the wind farm is improved considerably and the oscillations of the DFIG rotor speed are reduced efficiently during the fault. Furthermore, the comparison confirms the superior dynamic performance of the STATCOM controller in enhancement the FRT capability as compared with the FRT control strategy.