Three-phase four-wire electrical distribution systems have been widely employed in manufacturing plants, commercial and residential buildings. Due to the nonlinear loads, the neutral conductor carries excessive harmonic currents resulting in wiring failure of the neutral conductor, overloading of the distribution transformer and a voltage drop between the neutral and the ground. This paper proposes a reduced rating active power filter to suppress neutral current harmonics in three-phase four-wire electrical distribution systems. The proposed system is simple in control and the VA rating of the inverter could be significantly reduced since only the fundamental current due to unbalanced loading flows through the inverter switch. The experimental results on a prototype validate the proposed control approach.