Wind energy is emerged rapidly as the most important and viable sustainable power source due to the mature technology and wide availability. The integration of wind energy sources and utilization of nonlinear loads having different characteristics results in several challenges in a distribution system. One of which is power quality issue .Hence, in this work, the impact of power quality issues in a distribution system integrated with the wind generation system is studied in the uses of a shunt active power filter (SAPF) and presence of non-linear load conditions. The realization of SAPF is carried out using active power component theory (APCT) for reference current extraction, proportional-integral (PI) controller, and fuzzy logic controller (FLC) for dc-link voltage regulation and a basic hysteresis band current controller method for the extraction of switching pulse for operational the inverter. To enhance power quality in the proposed system, a modified fuzzy logic-controlled (MFLC) is developed to improve the transient performance of shunt APF. The proposed model is developed in MATLAB and results are given so as to show the presentation of the performance of this compensation technique in terms of mitigation of system harmonics, reactive power compensation, and enhancing the power factor.