Abstract: Background and Objective: The complex ferroresonant behavior in power transformers can create overvoltages and overcurrents resulting in damage to power system equipment and customer installations. It can also cause subharmonics and nonlinear harmonics in power system. In this study, a new method was proposed to control and damp ferroresonant oscillations, which is based on a new ferroresonance limiter (FL). Materials and Methods: In order to control ferroresonance oscillations, a saturating choke and damping resistor was used to eliminate all the unwanted ferroresonant states. Since the ferroresonance phenomenon in transformer was described by nonlinear dynamics, chaos theory was used to study this phenomenon. By using this theory, the changes in system parameters which can cause chaotic ferroresonant oscillations, can be reviewed and analyzed in detail. Results: The behavior of the system during ferroresonance occurrence, with and without using proposed ferroresonance limiter, are discussed in bifurcation and phase plane diagrams. By using these diagrams, the behavioral changes of the system can be easily seen in two cases. Conclusion: The simulation results strongly show the effectiveness of using the proposed FL for limiting ferroresonant oscillations and creating stable orbit in power transformer terminals that energized by series capacitors or transmission lines compensated.