This paper proposes a half-bridge inverter based Active Power Quality Compensator (APQC) with a DC voltage balancer for electrified railways. The APQC is composed of three-leg structured power devices with two common DC capacitors. The first two legs perform as two half-bridge inverters to generate compensation currents and the third-leg is used for DC voltage balancer. The first-leg is connected to β-phase and the second-leg is connected to α-phase. Two DC capacitors are connected in series and midpoint is grounded. These two half-bridge inverters exchange and balance active power for two feeders through two common DC capacitors and compensate reactive and harmonic components of the distorted load currents. The third-leg controls two common DC capacitors to balance voltage level of each other. Using proposed APQC, the primary side of Scott transformer attains balanced and sinusoidal source currents. The principle and control algorithm of proposed a half-bridge inverter based APQC is discussed in detail. The proposed APQC is confirmed by both the PSIM computer simulation software and prototype experiment system. Simulation results show that the proposed APQC can achieve balanced and sinusoidal source currents in secondary side of Scott transformer.