Use of nonlinear loads and devices in power systems is expected to grow rapidly. Examples are thyristor-controlled inductors for FACTS, converters for HVDC transmission and large adjustable speed drives. All of these loads inject harmonic currents into the power system. A novel hybrid filter topology and its control, to prevent such harmonic currents from entering the power system, are presented in this paper. Analysis shows that in the proposed filter, the power electronic converter, required to generate harmonic currents for compensation, has a rating of only 9 when compared to the converter rating in an active filter and approximately one-half of that in a series-hybrid filter discussed in the literature. The proposed topology enables practical implementation of active harmonic current filters. The control of this filter under transient conditions such as start-up and during steady state is demonstrated by means of simulations. Results from a scaled-down hardware prototype are presented to verify the simulations.