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One of the main power quality concerns currently is the existence of harmonics. Shunt active power filters are widely applied in power distribution grids to mitigate current harmonics and compensate the reactive power. In this paper the instantaneous reactive power theory is used to detect reference compensation current for the controller of the shunt active filter and a hysteresis current controller is used to synthesize it precisely. Hysteresis current controller is one of the simplest current control methods and the most popular one for active power filter applications, but it suffers from an uneven switching frequency, to overcome this disadvantage a novel fuzzy hysteresis current controller is being used. The proposed controller is characterized by simplicity because of reducing the size of calculations that makes it acting faster and doesn't rely on the load parameters. The system was modeled and simulated using MATLAB/SIMULINK. The results of simulation are presented and discussed they show the effectiveness of the proposed fuzzy hysteresis controller in improving the PWM performance and thus improve the shunt active power filter performance. [ABSTRACT FROM AUTHOR]