In this paper the performance of four harmonic extraction algorithms for active power filters are evaluated based on their steady state and dynamic performance. The techniques which are considered for comparative study are (i) filtering approach using the conventional low pass filter, (ii) instantaneous real and imaginary power (pq) theory, (iii) instantaneous active and reactive currents method (dq), and (iv) nonlinear least squares (NLS) estimation method. Comparison is based on simulation studies carried out in SABER. It is shown through simulation results that the dynamic behaviour of the harmonic extraction approach has an effect on the active power filter ratings. The simulation study reveals the superiority of the nonlinear least squares approach. This method provides good dynamic response and also extracts the load current harmonics explicitly. © 2007 IEEE.