This This paper presents a compensating system for the harmonic currents, the reactive power and source neutral conductor current in three-phase four-wire distribution system by using a five-level cascaded H-bridge voltage source inverter (CHB-VSI) based shunt active power filter (SAPF). A controller based on the d-q-0 theory (synchronous reference frame) and in-phase disposition (IPD) modulation technique is introduced for the SAPF. The distribution network which supplies mixed non-linear loads and employing CHB-VSI based SAPF is simulated by MATLAB/SIMULINK software. The performance of SAPF is analyzed by using the proposed control technique on the total harmonic distortion of source current, power factor and reactive power. Besides, it is illustrated by extensive simulation results, the effectiveness of five-level SAPF on source neutral conductor current. © 2013 IEEE.