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To pursue an improved solution to instantaneous reactive power and harmonics compensation with intensively nonlinear and quasistochastic loads, an effective algorithm is presented with comprehensive integration of the ip-iq and p-q methods to detect instantaneous reactive and harmonic currents. The algorithm can be applicable in three-phase circuits of any operational conditions, including three-phase four-wire circuits, asymmetric and/or harmonic voltage sources, etc. Both theoretical deduction and computer simulations demonstrate the accuracy and feasibility of the algorithm. Also, the above algorithm is expanded for further applications, which can effectively realize extraction and decomposition of the active or reactive components of either positive-sequence or negative-sequence currents with respect to any order harmonics.