Active Power Filters (APFs) have been used for reducing waveform distortion and improving power quality. However, this function can be improved by means of a selective harmonic compensation. Since an APF has rating restrictions, it is convenient to have the option of selecting an individual or a set of particular harmonics in order to compensate and apply the total APF capabilities to eliminate these harmonics, in particular those with a greater impact on the Total Harmonic Distortion (THD). This paper presents the development of a new APF prototype based on a three-phase three-level Neutral Point Clamped (NPC) inverter with selective harmonic compensation capabilities and reactive power compensation. The selective harmonic compensation approach uses several Synchronous Rotating Frames (SRF), to detect and control individual or a set of harmonics using d and q variables. The APF includes a Three-Dimensional Space Vector Modulator (3D-SVPWM) in order to generate the compensation currents. Because of its multilevel topology, the proposed active power filter can be used in diverse power quality applications at sub-transmission and distribution voltage levels. Simulation and experimental results are shown to validate the proposed solution and assess the prototype performance in different scenarios.