Active power filters (APF) can be employed for harmonic compensation in power systems. In this paper, a fuzzy based method is proposed for identification of probable APF nodes of a radial distribution system. The modified adaptive particle swarm optimization (MAPSO) technique is used for final selection of the APFs size. A combination of Fuzzy-MAPSO method is implemented to determine the optimal allocation and size of APFs. New fuzzy membership functions are formulated where the harmonic current membership is an exponential function of the nodal injecting harmonic current. Harmonic voltage membership has been formulated as a function of the node harmonic voltage. The product operator shows better performance than the AND operator because all harmonics are considered in computing membership function. For evaluating the proposed method, it has been applied to the 5-bus and 18-bus test systems, respectively, which the results appear satisfactorily. The proposed membership functions are new at the APF placement problem so that weighting factors can be changed proportional to objective function.