Zero-sequence harmonics caused by nonlinear loads usually result in high voltage distortion levels throughout the facility, neutral conductor overloading, motor heating, transformer heating, increased losses, and excessive harmonic injection onto the utility supply system. This paper presents a novel method to eliminate zero-sequence harmonics by using Zero-sequence Resister Block (ZRB) and Zig-Zag transformer. Zig-Zag transformer is a special connection of three-phase transformerpsilas windings. The ZRB is also a special connected transformer, whose three windings are wounded in the same core. The ZRB has zero reactance for positive and negative-sequence components but giving three times of self-reactance for zero-sequence reactance. In this paper, an analysis is carried out; simulations and laboratory tests are used to evaluate the performance of the Zig-Zag transformer and ZRB under various system conditions. The simulation and laboratory test results indicate that the combination of ZRB and Zig-Zag transformer as filter is a better and effective way to attenuate the neutral current, which also provides an innovational way to improve power quality.