Dynamic behavior of the harmonic detection part of an active power filter (APF) has an essential role in filter compensation performances during transient conditions. Instantaneous power (p-q) theory is extensively used to design harmonic detectors for active filters. Large overshoot of p-q theory method deteriorates filter response at a large and rapid load change. In this study the harmonic estimation of an APF during transient conditions for balanced three-phase nonlinear loads is conducted. A novel fuzzy instantaneous power (FIP) theory is proposed to improve conventional p-q theory dynamic performances during transient conditions to adapt automatically to any random and rapid nonlinear load change. Adding fuzzy rules in p-q theory improves the decomposition of the alternating current components of active and reactive power signals and develops correct reference during rapid and random current variation. Modifying p-q theory internal high-pass filter performance using fuzzy rules without any drawback is a prospect. In the simulated system using MATLAB/SIMULINK, the shunt active filter is connected to a rapidly time-varying nonlinear load. The harmonic detection parts of the shunt active filter are developed for FIP theory-based and p-q theory-based algorithms. The harmonic detector hardware is also developed using the TMS320F28335 digital signal processor and connected to a laboratory nonlinear load. The software is developed for FIP theory-based and p-q theory-based algorithms. The simulation and experimental tests results verify the ability of the new technique in harmonic detection of rapid changing nonlinear loads.