In this paper the reference current for Voltage Source Converter (VSC) of the Shunt Active Power Filter (SAPF) is generated using Synchronous Reference Frame method, incorporating the PI controller with anti-windup scheme. The proposed method improves the harmonic filtering by compensating the winding up phenomenon caused by the integral term of the PI controller. Using Reference Frame Transformation, the current is transformed from a − b − c stationery frame to rotating 0 − d − q frame. Using the PI controller, the current in the 0 − d − q frame is controlled to get the desired reference signal. A controller with integral action combined with an actuator that becomes saturated can give some undesirable effects. If the control error is so large that the integrator saturates the actuator, the feedback path becomes ineffective because the actuator will remain saturated even if the process output changes. The integrator being an unstable system may then integrate to a very large value, the phenomenon known as integrator windup. Implementing the integrator anti-windup circuit turns off the integrator action when the actuator saturates, hence improving the performance of the SAPF and dynamically compensating harmonics in the power network. In this paper the system performance is examined with Shunt Active Power Filter simulation model.