Abstract: The Distributed generated system originated due to the demand of electrical energy and keen scarcity of conventional energy sources. The main problem is the harmonization of the DG to the utility grid. Usually, for synchronizing the utility grid with DG source current regulated PWM voltage-source inverters (VSI) are used in order to meet the following objectives: 1) To improve grid stability 2) To control active and reactive power through voltage and frequency control 3) Improvement of power quality, etc. By using Fuzzy with hysteresis controller enhancement of power quality is made by diminishing current error at higher band width. This system is modeled and simulated in the MATLAB/Simulink model and the results obtained are compared with conventional hysteresis controller.