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Injection-type hybrid active power filter (IHAPF) shows great promise in reducing harmonics and improving power factor with a relatively low capacity active power filter (APF), but suffers from fundamental current circulation that inadvertently impacts the compensation performance and stability of the IHAPF. In this paper, the control model of IHAPF is established first, and then the origin and harm of fundamental current circulation are analyzed. To solve this problem, a double closed-loop control method is proposed. In the double closed-loop control scheme, the outer control loop based on injection harmonic current detection is used to eliminate load harmonic current, while the inner control loop based on APF output current detection is used to ensure the secure operation of IHAPF. The new control method is compared to other IHAPF control methods. It is implemented in a 100-kVA IHAPF in the laboratory. Both simulation and experimental results show that the new double closed-loop control method is not only easy to implement, but also very effective in reducing harmonics. The fundamental current circulation issue was also resolved with the new design.