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SUMMARY The cascaded H-bridge (CHB) multilevel inverter is being recognized as the most suitable topology for high-power medium-voltage power quality conditioning applications. This paper presents mathematical modeling and effective controller design methodology for the CHB-based active power filters (APFs), which achieves dynamic reactive power and harmonic compensation. The most crucial problems in CHB-APF control are the simultaneous requirements of both accurate harmonic current compensation and the dc-link voltage stabilization among the H-bridges, which is the prerequisite for the stable operation of CHB-APF. To achieve dc-link stabilization, a novel voltage balancing algorithm is proposed by splitting the dc-link voltage control task into two parts, namely, the average voltage control and the voltage balancing control, where the sine and cosine functions of the phase angle of the fundamental component of the grid voltage are used, respectively. To ensure accurate phase tracking, a novel phase-locked loop (PLL) is proposed by using the adaptive linear neural network (ADALINE), where the grid voltage background distortion is also taken into account. The superior performance of the ADALINE-PLL is validated by comparison with the existing PLLs in literatures. Furthermore, the proportional-resonant (PR) controller is used for the reference current tracking. A separate ADALINE algorithm is applied for reference current generation (RCG) for the CHB-APF. The excellent performance of the ADALINE-based RCG scheme is verified by comparison with the existing RCG schemes, namely, the low-pass filter approach and the single-phase p − qmethod. The experimental results on the three modules CHB-APF are presented, which verifies the effectiveness of the proposed control algorithms. Copyright © 2011 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]