The main challenge associated with the grid‐connected inverter (GCI) in distributed generation systems is keeping the harmonic content of the output current below the specified value and compensating for unbalanced loads even when the grid is subject to disturbances such as harmonic distortion and unbalanced loads. To overcome these challenges, a current control strategy for a three‐phase GCI under unbalanced and nonlinear load conditions is presented. The proposed control method enables the GCI to inject balanced and clean currents to the grid even when the local loads are unbalanced and/or nonlinear; it also compensates for the harmonic currents and controls the active and reactive powers. The main advantage and objective of this method is to effectively compensate for the harmonic current content of the grid current and microgrid without the use of any compensation devices such as active, passive and LCL filters.