The power-quality issues in power distribution system are not new, exponentially increased due to usage non-linear apparatus like power electronics conversion methods. Most of industries and domestic applications, power-electronic converters are highly used for conditioning to attain requisite form of energy with greater efficiency features. But, these conditioning devices produces the harmonic currents and affecting the stable power flow, poor voltage wave-shape, low power-factor, heat losses, affect the loads connected near to common-coupling point. Over the passive schemes, active compensation scheme plays a significant role to mitigate harmonic distortions and furnishing improved power-quality features. In this paper, a Fuzzy controlled Variable Leaky Least-Mean Square control strategy has been proposed to drive the shunt power filter. It mitigates un-even harmonics, power-factor enhancement, exchange of reactive power, and un-balancing loading conditions with good stable performance. A critical analysis of proposed compensation strategy is evaluated under several load conditions verified by using computer simulation tool, simulation results are illustrated with sufficient comparisons.