This article proposes an adaptive type-2 fuzzy neural network control system to enhance the performance of power quality improvement. First, the dynamic model of APF with lumped uncertainties caused by parameter perturbation of ac inductor and dc capacitor is briefly introduced. Then, an integral-type terminal sliding mode control (TSMC) is developed for the finite-time reference signal tracking. Meanwhile, in terms of the considered chattering problem, saturation function is utilized in the proposed TSMC. Moreover, an adaptive type-2 fuzzy neural network (T2RFSFNN) is derived to achieve the model-free design, by applying the recurrent feature selection algorithm in the type-2 fuzzy neural network. To enhance the capacity to represent the uncertainties, adaptive learning mechanisms for updating the parameters of T2RFSFNN are derived by the Lyapunov theorem. Furthermore, a robust compensator with an adaptive uncertainty estimation law is investigated to relax the requirement for lumped uncertainties. Finally, the control performance using the developed T2RFSFNN is evaluated by some comparative experimental results.