Implementation of a smart power conditioning system with a novel seamless transfer method for an energy storage system (ESS) was proposed in this paper. The power conditioning system is to control the power quality or protect the grid system. Therefore, it requires various functions. One of the these functions, the uninterruptible power supply (UPS) function, was applied to proposed power conditioning system. In order for the grid-interactive power conditioning system to continuously supply power to the load, two operation modes are required depending on the grid state. One is the grid connected (GC) mode and the other is the stand-alone (SA) mode. Under normal grid condition, the power conditioning system is operated in GC mode and controls the current. On the other hand, under abnormal grid conditions such as grid outage, the power conditioning system operates in SA mode and supplies power to the load. Unintentional sudden changes in operating mode cause unwanted phenomena (e.g., voltage/current spike, inrush current) which can make system degradation or failure. To improve this situation, the seamless transfer function became necessary. In this paper, by adding seamless function to power conditioning system, it is possible to supply power to the load stably regardless of grid state. In addition, it is possible to prevent secondary accident and to operate stably even if non-detection zone condition occurs by using an active frequency method. The proposed control algorithm was verified through field experiments.