In this paper, a 1.5 kW Interior Permanent Magnet Synchronous Generator (IPMSG) with a power conditioner for the grid integration of a variable-speed wind turbine is developed. The power-conditioning system consists of a series-type 12-pulse diode rectifier powered by a phase shifting transformer and then cascaded to a PWM voltage source inverter. The PWM inverter is utilized to supply sinusoidal currents to the utility line by controlling the active and reactive current components in the q-d rotating reference frame. While the q-axis active current of the PWM inverter is regulated to follow an optimized active current reference so as to track the maximum power of the wind turbine. The d-axis reactive current can be adjusted to control the reactive power and voltage. In order to track the maximum power of the wind turbine, the optimal active current reference is determined by using a simple MPPT algorithm which requires only three sensors. Moreover, the phase angle of the utility voltage is detected using a simple electronic circuit consisting of both a zero-crossing voltage detecting circuit and a counter circuit employed with a crystal oscillator. At the generator terminals, a passive filter is designed not only to decrease the harmonic voltages and currents observed at the terminals of the IPMSG but also to improve the generator efficiency. The laboratory results indicate that the losses in the IPMSG can be effectively reduced by setting a passive filter at the generator terminals.