A low cost single-phase active filter with power factor correction and harmonic compensation capability for solving power quality problem is proposed. Adaline neural networks based reference current extraction with PI voltage regulation is presented for the control of the shunt active filter. Harmonic reductions and power factor correction will both be carried out by the proposed filter. The design of the current extraction with reduced number of sensors and the voltage control loop are explained. Experimental results are included to demonstrate the effectiveness of the proposed design scheme. Copyright (C) 2011 Praise Worthy Prize S.r.l. - All rights reserved.