The controlled reactor has the advantages of simplifying the control of reactive power and reducing the active power loss of the grid. Taking the operation mode of Inner Mongolia power grid in 2011 into consideration, the configuration scheme for the application of controlled reactor to Inner Mongolia 500 kV power grid is discussed by power flow calculation software, for reducing the system loss on the premise of ensuring voltage passing rate. In addition, through the effect analysis of voltage modulation, economic analysis, and the simulation analysis of N-1 breaking, the feasibility of the configuration scheme is discussed. Furthermore, the conclusion of the application of controlled reactor to Inner Mongolia 500 kV power grid is drawn and some suggestions are provided.