Power quality has become an important issue in recent years due to the increasing use of solid-state switching devices and other nonlinear loads. These non-linear loads generate undesirable harmonics causing distortions in the current and voltage waveforms.Shunt active power filters have proven very effective to mitigate harmonics. This paper describes a hybrid fuzzy sliding-mode controller (HFSMC) for a three phase shunt active filter to enhance the power quality and improve the reactive power profile in the distribution grid.The proposed method attenuates the effect of both uncertainties and external disturbances, and eliminates the chattering phenomenon induced by classical sliding-mode control. Simulation are presented to demonstrate the effectiveness of the proposed control strategy. The results show that the proposed HFSMC control scheme is able to mitigate harmonic distortions, and provide reactive power compensation and power quality improvement.