This paper proposes a robust reference current extraction method useful for active power filters (APFs) connected to the More Electric Aircraft (MEA) grid for addressing power quality issues. Hence, it is essential to investigate and develop better APF harmonic compensating control algorithms that can eliminate the impact of harmonics emerging from the nonlinear loads connected to the MEA grid. The proposed method envisages a half-cycle moving window discrete Fourier transform filter approach to rapidly extract the fundamental positive sequence (FPS) from a polluted three-phase grid voltage. Thus, allowing the harmonic cancelation method to generate desired clean reference current which is in phase with FPS component of the grid voltage. This reference current is used in conjunction with the hysteresis current controller to generate appropriate gate pulses for the current-controlled voltage source APF. The employment of the digital filter in the control structure of the APF ensures improved power quality for the MEA grid as compared to traditional filtering algorithms. The numerical and experimental results demonstrate that the proposed control solution helps to reduce the total harmonic distortion under abnormal grid disturbances, thus, indicating the potential benefits of the proposed work for addressing power quality issues in MEA applications.