In a variable switching frequency control scheme, it is challenging to design the voltage source inverter (VSI) parameters without knowing the maximum and minimum switching frequencies. The switching frequency variation depends on the system parameters. Therefore, the expression for frequency variation in one inverter topology does not hold in other topologies. The design of hysteresis current controlled four-leg shunt active power filter (APF) requires the switching dynamics analysis to ensure satisfactory performance of the inverter. In this study, a detailed analysis on the switching dynamics of hysteresis current controlled four-leg VSI and design of various inverter components for compensating unbalanced and non-linear loads are presented. The results obtained from these analyses can be used in any applications involving hysteresis current controlled four-leg VSI. These results are supported by detailed simulation studies conducted on a three-phase four-leg shunt APF system using Matlab/Simulink. The theoretical studies and design of passive components are also verified by conducting experiments on a prototype of four-leg shunt APF developed in the laboratory.