A redox flow battery (RFB), as with superconducting magnetic energy storage, has a high speed response, and its active and reactive powers can be modulated in the four quadrants of the power chart. This type of rechargeable battery is not aged by frequent charging and discharging, and the battery efficiency increases when the charging/discharging period becomes shorter. Moreover, in practical applications a RFB has several advantages, such as operation at ambient temperature, short duration overload capability, small power loss during standby, a long service life, flexibility in layout and ease of power output capacity enhancement. These characteristics make the RFB most suitable for power quality improvement in autonomous power systems. In this paper we propose the application of an RFB for power quality improvement of an isolated wind diesel power system. Suitable control strategies, based on fuzzy logic are used to modulate the exchange of real and reactive powers between the RFB system and the ac bus of the wind diesel power system. The effectiveness of the proposed scheme in dealing with various perturbations is then studied and the results are presented.