Dynamic control over real and reactive power flow is one of the key areas of concern for the modern grid. Traditional FACTS-based devices have proven to be too costly and complex to achieve any significant market penetration. Modifying existing transmission assets to make them controllable may be a cost-effective method of increasing the grid controllability. Controllable network transformers (CNTs) have been theoretically shown to be an effective real and reactive power flow controller. However, the CNT is shown to produce unwanted third harmonic voltages and currents in the system, which must be handled. In this paper, the use of a hybrid active filter (HAF) is proposed for this purpose. This paper discusses the approach for design and control of such an integrated CNT-HAF system. It is shown that the integrated CNT-HAF system can also mitigate system unbalance, apart from providing four-quadrant control capability. Furthermore, this paper also presents experimental results of an integrated CNT-HAF system, rated at 200 kVA and 2400 V.