This paper presents a control algorithm for a 3-phase 4-wire series active Power filter. This control algorithm compensates harmonics, input power factor and neutral line currents which are generated by balanced or unbalanced nonlinear loads. The advantage of this control algorithm is direct extraction of compensation voltage references. Therefore, the calculation time is shortened and the performance of the series active power filter is improved. The compensation principle of the proposed control algorithm is presented in detail. A 3KVA laboratory prototype of the three-phase four-wire series active power filter was built and experiments have been carried out. Experimental results are shown to verify the effectiveness of the proposed control algorithm.