This paper proposes a multitasking control algorithm for grid-connected inverters (GCIs) in distributed generation (DG) applications. A single-phase H-bridge voltage source inverter is used as a power electronic interface between the DG system and the grid. The proposed control algorithm operates the GCI in current control mode to achieve desired active power injection to the grid. In addition to active power injection, the proposed control algorithm has current harmonics mitigation and reactive power compensation capabilities for power quality enhancement. The control algorithm utilizes only the remaining capacity of the GCI for power quality improvement. The proposed control algorithm employs a current decomposition structure based on multiple adaptive noise cancellation (ANC) filters for extraction of harmonic and reactive currents of the local loads. The extracted harmonics are used in estimating compensating currents to be injected by the GCI. A single-phase phase-locked loop (PLL) using ANC filters has been developed to synchronize the GCI at fundamental frequency, which makes the proposed control algorithm adaptive to grid frequency fluctuations and immune to grid voltage distortions. The effectiveness of the proposed control is illustrated through computer simulation and experimental results. The influence of PLL dynamics on GCI performance has also been studied using results.