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An active power filter or power-line conditioner is an important way to compensate reactive power and suppress harmonics drawn from nonlinear loads. A single-phase active filter is presented to operate as a controlled current source to compensate the load harmonics and generate a sinusoidal line current from the AC source. The adopted single-phase voltage-source inverter is based on four active switches and two capacitors to achieve three-level pulsewidth modulation. The circuit topology of the adopted inverter has fewer power semiconductors compared with the single-phase neutral-point-clamped inverter and flying capacitor inverter. To maintain the DC-link voltage constant and compensate the power losses of inverter, a proportional-integral voltage controller is used in the outer control loop. A carrier-based current controller is adopted in the inner control loop to track the line current command in phase with the mains voltage. The effectiveness of the proposed control algorithm is verified by computer simulation and experimental results.