In this paper Shunt Active Power Filter (SAPF) with Fuzzy Logic Controller (FLC) is modeled and tested. The instantaneous reactive power theory is used for extracting the reference compensating current. A fuzzy logic controller is used to regulate the DC link voltage of Voltage Source Inverter (VSI) in order to improve the dynamic performance, to ensure sinusoidal source currents and to produce a high power quality. In this work single phase shun active power filter is implemented to compensate harmonics and reactive power using Fast Fourier Transform (FFT) analysis. The main goal of the proposed active filtering system is to maintain the Total Harmonics Distortion (THD) well within IEEE-519 on harmonics levels. The simulation results were taken from Matlab simulink tool box.The proposed system was implemented by using hard ware setup. Sinusoidal Pulse Width Modulation (SPWM) pattern is used to generate switching signal to the Voltage source inverter.