Nowadays every sector from industries, commercial to residential uses the Uninterruptable Power Supplies (UPS) System and power electronics devices due to their essential need of power and application however these are beneficial and vital for each sector but they produce harmonics in the power system. These harmonics generate electrical disturbance and distort waveforms which results in power loss due to poor power quality. That is why to enhance the standard of power provision this harmonic disturbance should be lowered with implementation of Passive, EMI and other Active Power Filters (APF) [1]. Energy security and reliability are present-day problems and unnecessary load shedding is a great issue in Pakistan as well as in other backward countries due to rising energy consumption demand and reduced provision. Reserve supply through UPS is a temporary remedy for customers in such circumstances. When national grid power is not available and primary source fails to recharge the batteries, UPS will supply power automatically and maintains a continuous Power without delay or transients [2]. During the power conversion in rectifier and inverters (AC-DC-AC Converters) harmonics currents and voltage distortion caused in Uninterrupted Power Supply UPS requires up to date and rapid filtering method to remove and mitigate harmonics in order to have desired power transfer, raise overall efficiency, reduce losses, enhance accuracy and lifecycle of apparatus. UPS offers instant protection which also makes power losses significantly due to harmonic current [3-6]. It is the need of the time Abstract: Hybrid Active Power Filter (HAPF) is designed and applied for Uninterrupted Power Supply (UPS) System to mitigate harmonic currents in UPS during the power conversion from rectifiers to inverters (AC-DC-AC Converters). Various UPS types and topologies are used for continuous power supply without delay and protection to connected loads. In spite of the fact that UPS is one of the power quality apparatus but it has also drawback of disturbing the power system quality of system by current harmonics and voltage distortion during conversion of power. Passive and EMI Filters could not eliminate harmonics effectively from UPS system therefore it requires modern, rapid filtering method as well combination of Active and Passive Filters. Proposed model of HAPF for UPS System could mitigate current harmonics for optimal power transfer and minimize losses, increase overall efficiency, reliability and life span of equipment. Higher harmonic current and higher voltage distortion leads to greater power loss. In this paper the (d-q) theorem is applied for the identification of harmonic currents. The d-q theorem and calculation creates the signal of reference compensation current and this produced signal of current is tracked by the yield current of the voltage source converter.. Hysteresis based controller for HAPF is applied to create the switching signals to regulate and maintain the voltage source converter output currents. Harmonics and effi...