Electric power quality in power transmission/distribution systems has deteriorated considerably with the increase in the number and the capacity of inverter-based distributed generators (DGs). This is caused by inverters, connecting DGs to conventional power grids, tend to generate harmonic currents and voltages due to the switching operations of their transistors and diodes. Therefore, this paper presents new methods to adopt harmonic filters to an inverter-based DG, considering a system consisting of both an inverter-based DG and harmonic filters. In order to prove that the system proposed in this paper can be used generally, this paper describes the simulation results obtained by using PSCAD/EMTDC: the relationship between the total harmonic distortion (THD) of the output current and the output power of a DG, and the harmonic mitigation ability of passive and active filters. Furthermore, the system is obliged to satisfy the regulations made by Korea Electric Power Corporation (KEPCO). In the regulations, DG power factor needs to be maintained between 0.9 and 1 in a grid-connected mode. Thus, this paper suggests two methods for the system to control its power factor. First, the power factor should be controlled by the DG inverter rather than an active filter because this brings a dramatic decrease in the capacity of the active filter. Second, the DG should absorb reactive power only in the low output power range in order to prevent a useless increase in the inverter capacity. This method is expected to result in a variable power factor of the system according to its output power. With these control methods, the proposed DG system can successfully operate in a grid-connected mode with an optimally-reduced capacity of active harmonic filters and DG inverters while satisfying the regulations in terms of voltage variation, power factor, and THD.