In this paper, a novel algorithm with a rotating coordinate system is proposed to improve the total harmonic distortion (THD) of PWM rectifiers. Aiming at solving the disadvantages of poor dynamic response, unstable switching frequency, and a large calculation burden in some current control methods, the proposed method employs the rotating coordinate system to control the active current and reactive current separately while modifying the calculation error. The proposed method is verified through a single-phase PWM rectifier. Based on the measured results and compared with many other algorithms, such as the peak current mode control (PCMC), average current mode control (ACMC), one cycle control (OCC), and modulating duty ratio (MDR), the proposed method not only effectively reduces the intermediate variables during calculation, but also improves the THD and reliability of the circuit. The proposed method can be applied in single-phase PWM rectifiers applied in household-distributed energy storage systems.