This paper deals with the hybrid shunt active filter for harmonic compensation of a three-phase diode rectifier in a 480-V adjustable-speed motor drive system. The hybrid filter is formed by a three-phase LC filter tuned around the seventh harmonic frequency and a small-rated three-phase voltage-source PWM inverter. The LC filter and PWM inverter are directly connected in series. As a result, the DC capacitor voltage of the PWM inverter in the hybrid filter is much lower than that of a conventional pure shunt active filter. This results in higher efficiency, less switching ripple, and less EMI emission. Computer simulation is carried out to compare the hybrid filter with the pure filter in terms of circuit configuration and filtering performance. Simulation results indicate that the hybrid filter is superior in effectiveness and viability to the pure filter. In addition, theoretical analysis based on vector loci confirms the validity of the simulation results. © 2005 Wiley Periodicals, Inc. Electr Eng Jpn, 153(2): 61–70, 2005; Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/eej.20145