Most of researchers studied a Shunt Active Power Filters (SAPF) based on conventional two-level inverters with conventional controllers that requires a complex and a complicated mathematical model. In order to overcome this problem a Hysteresis band controller based diode clamped multilevel inverter is implemented and extended to a five level shunt active power filter. This research investigates the design of Hysteresis band controller biasing multilevel inverter to works as Shunt Active Power Filter (SAPF). Making use of the multilevel inverter advantages of less total harmonic distortion and reduced semiconductor ratings compare with conventional inverter. A three phase 5- level diode clamped Multi-Level Inverter (5-LDCMLI) uses as a voltage source inverter (VSI). The Hysteresis band controller determines the optimum switching pattern needed for the inverter to compensate the current harmonics and the reactive power of the load. The inverter is investigated by this study using MATLAB Simulink.