The widespread adoption of voltage-source converters (VSCs) in renewable energy integration has intensified stability challenges, including negative impedance oscillations and power coupling under non-ideal grid conditions. Virtual impedance control, a widely adopted method, mitigates these issues by introducing artificial impedance to counteract VSCs’ negative impedance, thereby eliminating oscillations. It also enables precise P/Q droop control by compensating high-resistive transmission lines. However, this approach faces inherent limitations: stabilizing systems with strong negative impedance may require impractical control parameters (e.g., excessively high virtual resistance), and it can only provide virtual series compensation to the network. This work extends the idea of virtual impedance to a virtual two-port network, which provides more flexibility in managing VSC dynamics and power flow control. We prove that the virtual two-port control can more easily achieve VSCs’ input-impedance shaping for both symmetric and asymmetric impedance. Furthermore, it expands power flow control capabilities, emulating functionalities of the Unified Power Flow Controller (UPFC) to achieve comprehensive regulation through series/shunt compensation, phase shifting, and voltage adjustment. Our results are demonstrated and verified by several illustrative examples.