This study presents a novel and efficient technique for extracting the most common voltage disturbances in distribution systems. The new technique depends on a new recursive implementation of the digital second-order narrow-band filters. The proposed extraction technique is accurate and simple. In addition, a generalised compensation strategy is developed and utilised for mitigating the most common voltage quality problems such as voltage harmonics, voltage unbalance, voltage sags, voltage swells and voltage flicker. The suggested technique and the mitigation results are validated by digital simulation results obtained from an industrial distribution system. Also, the experimental results are provided to prove the practicality of the proposed concepts.