An improved model for a three-phase four-wire proportional-resonance controlled shunt active power filter is presented in this study. The resonance caused in the parallel circuit of grid reactance and the load which APF compensates for can be reflected by this model. Stability analysis combined with the new proposed model is also given in this study. It fills the gap to determine system stability in several conditions where the previous theory will misjudge. To suppress the resonance, theoretical derivation and simulation analysis are carried out. The results show the resonance can be suppressed by adopting proper damper.