AC railway vehicles controlled by PWM line side converters inject harmonic current into the feeding overhead line. This causes problems such as resonance expansions which produce misfunctions or overcurrents at substations and electromagnetic interference with signalling systems. Normal active filters only shift the harmonic frequencies to a higher range. A novel harmonic compensator produces an exact counter mmf of which in the main transformer main flux becomes then sinusoidal. Experimental results from a small model of Japanese AC railway vehicles are described. Especially, in the 3-4kHz frequency range that coincides with the signalling band, harmonic currents are quite well suppressed. From the result, this novel harmonic compensator and its method appear promising for use in any 50Hz, and 60 Hz fed PWM controlled AC railway traction system.